Rampage01There are a lot of things that don't make sense, and,...

Rampage01
There are a lot of things that don't make sense, and, as Judge Judy says everyday on Channel 10, "If it doesn't make sense, it is not true".

At the AGM, the accountant tried to give a lengthy explanation of what the loan was all about and for a moment I thought he was going to say that there was no debt. However, when you read the original prospectus, it is not all that complicated.

The debt itself is a simple mathematical calculation providing the correct interest rates and default interest rates are applied. It appears they were not always correctly appled in the early years of the debt.

It is now 7 years since DPL/PPN listed in May 2003 so I hope PPN still holds adequate security for the debt. It is up to the bean counters and auditors to ensure that PPN does hold adequate security.

Sub-section 116.2 of the PPN constitution provides that the Company has a first and paramount lien on all shares registered in the name of a member (whether solely or jointly with others) for all money presently payable by the member or the member's estate to the Company.

Sub-section 116.9 provides that if the Company has a lien on securities in a CHESS Holding, the Company may give notice to SCH, in the form required by SCH from time to time requesting SCH to apply a Holding Lock to that CHESS Holding.

I assume there are also provisions of the Corporations Act 2001 which would make life very difficult for a director in default on a debt to a company.

There are only about 6 million shares not owned/controlled by the Boss. At the AGM I pointed out that if he were to buy out those 6 million shares @ 50 cps, this would cost him $3 million, roughly the same amount as his debt. He would then own 100%, do as he liked with the debt and not have to deal with our annoying questions at AGMs.

The original DPL shareholders paid 50 cents a share at the IPO in May 2003, so a buyout at 50 cps or higher seems to make a lot of sense to me. This is only my opinion but, in the greater scheme of things, my opinion is not worth much.