Its Obvious that its not only LCE who didnt do their homework and are now seeking blood so lets address the issues you raise:
1. Hedging Loss - Of course this was a mistake but this information and its impact was made known at the agm in OCTOBER 2008. At that stage no-one was certain what the Aussie dollar was going to do. I seem to recall Sky business earlier in 2008 talking about parity. Bankers were advising hedging as it climbs. So yes it was a mistake but given the climate its an easy one to criticize with 20:20 hindsight, 2. The capital raising was done without a discount to the market price. In fact that's probably why LCE is so cut up about it. It wasn't at the expense of other minorities as we see daily by much larger players. Daily over the past 6 months minorities have had to suffer massive dilution as these placements take place or a rights issue is undertaken at large discounts. THIS DID NOT HAPPEN HERE. 3. High debt levels. These were already there at year end and at the time LCE purchased the shares so it has only become an issue for them recently. They are high and I would hope that management address these in the next 6 months. I for one would take up my rights and seek to take up more. However you cannot blame management for accumulating such debt when everyone was and now you want to get rid of them for doing what everyone was doing. 4. Dividend cut. well I think that was responsible and you would have been jumping up and down had they paid a dividend under the circumstances. You cannot have it both ways.
This is all managements fault. Next you would like to blame them for the GFC as well. I didn't get told about any risk in 2007 by my bankers or by my expensive full service broker nor did he point out a number of the stocks I had would need capital as they had been sailing close to the wind. Had 2007 been different and the Aussie dollar hit parity you would be applauding management and then berating them for placing shares too cheaply. LCE would be happy and negotiating a board seat etc etc. Life doesn't run in straight lines. I can speak from experience in reshaping companies and if you knew what was going to happen you would be able to always get the cards to favour you. Here management created a plan and delivered it. It wasn't a 6 month plan but 3 years and I think they have done well. It has benefits and its not over budget and during that period some things that they didn't anticipate happened. they however stuck to it and have the space to correct what we don't like.
Now to your assertions about management:
They dont have a stake. having looked at their credentials in the chemical industry in some ways I like the fact that they are not too financially tied to the company. Independence does mean that they can disagree and even resign without the burden of financial risk. They have their reputations to loose and if you look at these credentials thats a lot to lose. I would however like executive management and at least one director to have a significant stake. That can be addressed.
On what basis can you assert that management interests are not aligned with shareholders. There no such evidence nor do they pay themselves enormous salaries etc etc.
Management are not taking responsibility by not resigning. That's absurd. I want management who know the company and the situation to remain stable and to work through the one issue that needs to be addressed - Gearing. If they all resigned the company would be in administration or taken over at a cheap price (OZ MINERALS) as the bankers would become insecure and pressure the company. The company needs stability. Bankers like stability and don't like people jumping ship. Nor do markets
No I think that LCE has spotted a rough diamond and is seeking to gain undue influence or even control over it to bundle it up and dispose of it at a profit for themselves. When do you buy property the cheapest just before its completed and the developer is squeezed and cannot be sure of its market value. that's where PSH is today and a few very few shareholders are seeking to benefit from this at the expense of us all.
I think that apathy may well allow LCE to win this vote and we will all suffer from this. Look how many people don't vote. Often less than 50% and LCE has 10% so effectively its harder for management to win the vote very often driven by apathy. Apathy allows the small to control and have a much larger say than they should have.
I do however agree with LCE in that I would vote against management having the right to place 15% of the shares but that shouldnt cloud the fact that management has delivered and the market update proves that and gives good guidance for the future. I am buying more shares are u? I don't believe that LCE has handled this appropriately and that this can be left until the AGM and they can nominate a director at that point, not now when we need to see all the facts and they are about to be released in the next few months. Is it because they want to get this undue influence now before more good news gets out.
Do your own research and before investing.
Disclaimer: I take no liability for the accuracy of my post. Do your own research prior to making any investment decision.
PSH Price at posting:
83.8¢ Sentiment: Buy Disclosure: Held
