Cuts could be deep in PaperlinX board battle

IF PAPERLINX chairman Harry Boon (right) loses his board seat at next week's shareholder meeting, it will not be without a fight.

IF PAPERLINX chairman Harry Boon (right) loses his board seat at next week's shareholder meeting, it will not be without a fight.

Boon, who in Insider's opinion was brave to pick up the chairman's role last August when founding chairman David Meiklejohn took his superannuation cheque and headed out the door, has become the focus of disgruntled share and hybrid preference stock investors in the euro-centric paper merchant that has an Australian listing through an accident of birth.

As such, the requisitions up for voting on next week are, first, Boon's removal, and second, the appointment of maverick investor Andrew Price as his replacement.

Technically, Price could already be sitting in the boardroom because Boon and his co-directors apparently offered him the chance to fill an existing gap but he apparently declined.

Insider suspects that the outcome next week could well be that wonderful piece of business jargon the "win-win". That would be Boon keeps his seat, and Price gets one, too.

That outcome is in spite of the way that the resolutions have been worded on the voting papers. Insider has seen many similar moves to oust directors, but the phrasing of resolutions is usually an "either or" formula where the appointment of a new director is dependent on removal of the old.

The second resolution nominating Price is specifically worded that he be appointed "in place of Mr Harry Boon". Of course, resolutions can be modified, but that wording makes it difficult for institutional investors to have an each-way bet by voting against dumping Boon, and in favour of bringing in Price. Logic suggests that you cannot appoint Price in Boon's stead unless Boon is gone.

Insider hears Boon has been out on the hustings trying to win the support of his three biggest investors Simon Marais' Orbis, Geoff Bazzan at Maple-Brown Abbott and Kent Jensen at Schroders.

Orbis has already been identified as a supporter of Price's gambit, and Boon readily acknowledges he has one very unhappy shareholder that has seen its investment decimated.

Price has promised speedy and swingeing action to reduce costs at PaperlinX apparently including sending him, his family and maybe even his Svengali-like adviser, Laurence Rodny, to Europe to head up the restructuring.

Boon is trying to persuade investors what already seems to have been sold to the company's bankers recovery is happening. As such, Dutch bank ING is letting PaperlinX keep ?15 million of the ?45 million from selling its Italian business to Lecta Group.

Word in the industry is that there is a second leg to Paperlinx's deal with Lecta that it has also agreed to source product from that group, at "sensible" prices, for other parts of its European paper selling and distribution.

Symex chief bales out

SYMEX Holdings chief Greg Tremewen appears to have caught his chairman Peter Robinson on the hop with his resignation yesterday.

Symex, maker of White King bleaches, Jiffy Firelighters and many a clothes wash, such as Lux and Softly, has had to get down and dirty to restore its fortunes.

Robinson was adamant last night in talking with Insider, though, that the decision to go was Tremewen's, and that the board had yet to even meet to consider a replacement.

Tremewen has given nine months' notice, which, if he works it out, would take him through to mid-December. Insider suspects, though, that both he and the company will be working to find an early replacement because Symex is still in intensive care mode, which is highly demanding for management.

Symex has been caught, as bankers love to say, in the "negative jaws" of a world where the high Australian dollar combined with high tallow prices has made it uncompetitive in the global market to which it exports its oleochemicals.

Couple that with the margin-pinching, brand-eliminating attitude of Australia's supermarkets to its consumer products operations (Symex's Huggie fabric softener was not considered cuddly enough for the retailers and is hard to find these days), and it is easy to see why Symex lost $1.4 million in the December half, even before impairment charges reduced the bottom line to a $20 million loss.

That outcome did not surprise the market or investors, because Symex had warned of the deteriorating conditions in late November and paid the price with a share price crunched from 35? down to current levels of 11.5?.

Only a week ago, Robinson put nearly $100,000 of his hard-earned into near doubling his own investment in the company to 2.1 million shares which cynics might see as an "averaging down" exercise, but actually fits with what would have been his first available buying window since balance date and the release of the half-year results at the end of February.

While Tremewen has not left the building, Robinson has taken over the investor relations role until a new managing director is appointed.

Tremewen was part of the original management buyout team that took what was then part of ICI, and later launched it on to the ASX under the chairmanship of former Victorian treasurer Alan Stockdale.

Tremewen left for a while, but returned not too many years ago to try to help steer it through. Insider suspects that Tremewen's problem in recent times, apart from the unremitting struggle to make money in oleochemicals, is that his skills lie in running the business and not so much the massaging of bankers and institutional investors that needs to be done when times are tougher.

Insider suspects that the outcome next week could well be that wonderful piece of business jargon the 'win-win'. That would be Boon keeps his seat, and Price gets one, too.

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