Like the damaged Titanic Penrice faces an inevitable doom. Like...

Like the damaged Titanic Penrice faces an inevitable doom.

Like the Titanic there has been a period of stability as the ship sinks inevitably lower in the water. There has been time for the women and children to take to the lifeboats.

The staff and directors have done a great job of keeping her afloat while she is flooded with debt. Keeping the morale of the staff up must be hard.

With a market cap of about $10m and debt of about $80m even the most optimistic must see the peril. There is discussion of whether it is a 'going concern'. At some point the banks will accept that each day the plant operates they lose more.

Now a squabble has broken out for control of the helm as she goes under. I can't imagine why anyone would want the job. The new directors could only rearrange the deck chairs.

The fate of Penrice will not be altered by any director; no matter how clever. Penrice is being crushed by the hard irreversible facts of an old plant, a product price set by foreign competition, a strong AUD and rising energy costs. The cost increases due to a carbon tax will be the final straw in this perilous situation.



bacci