PPA clears the decks
Article Date: Jul 01 2009Battle-scarred Pan Pacific Aggregates (PPA) says it can resume its key project after a debt settlement, local approval and fundraising.
British Columbia-based PPA, whose losses rose 43 per cent to £3.3 million in 2008, has all but clinched local regulatory approval for an operating permit or for its key Pumptown Quarry project in the west Canadian province, says managing director William Voaden. The AIM-quoted company has also struck a creditors’ agreement to pay 9 cents in the dollar, having won the support of major creditor HSBC, to which it will now pay C$150,000 (£798,000).
Voaden, a former luminary of English China Clays who now heads resources-oriented finance and broking outfit VSA Capital, says it will cost the company another £109,000 to settle its debts under this agreement. He points out PPA, which floated in 2005 at 80p and later hit 91p, recently raised £515,000 net at a barely visible 0.15p, after tapping backers for £1 million during last year.
Having shelved its original project in the region’s Sechelt Peninsula following indigenous people’s objections, PPA ran into crisis last year after buying the Pumptown granite quarry with cash and shares from the CNI Group, controlled by local brother developers Herb and Steve Dunton. Trouble soon erupted over hefty claimed liabilities on equipment leases and guarantees and serious problems over road and bridge access to the quarry and Hanson Westhouse controversially resigned as nominated adviser, to be placed by Dowgate Capital.
Voaden says PPA is paying £10,000 to the Dunton brothers, against a claimed £4.2 million and is also paying investment group RAB 16p in the pound on a £5 million debt. The company, which has also sold some non-core assets, is buying out its loan notes for £750,000.
Looking ahead, Voaden, who last year recruited Euan McAlpine, ex-Cazenove fund manager and former head of the McAlpine construction group’s quarrying arm, to head operations, says PPA will now set to work to put Pumptown into action, cashing in on what he sees as a regional shortage of aggregate. According to Voaden, the company, which will need to raise more money in due course, is also considering acquisitions, particularly among US resource royalty companies.
With PPA shares trading at a still-bombed out 0.38p, Voaden declares he wants Pumptown to make the company a bid target for major quarrying groups within five years. After all that has happened, this looks decidedly ambitious, but brave punters could find a flutter at these levels pays off if this time he succeeds.
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