The Australian-headquartered merchanting group is in the process of exiting from its European operations, which had been its biggest business, leaving a financial morass in its wake.
Paperlinx raised A$285m (£139m) by issuing 2.85m of the shares, a type of hybrid security used by Australian companies, in 2007.
It did not pay a distribution on the shares in 2013 or 2014.
Paperlinx is restricted from paying a dividend on its other classes of shares if it does not pay a distribution on the step-up securities.
Paperlinx’s annual report for the financial year to 30 June 2014 states: “The main lending facility in the UK and continental Europe contains a requirement to obtain lender approval for future distributions on the PSPS”.
Holders of the shares would have received the equivalent of the Australian 180 day bank bill swap rate, plus a margin of 4.65%, had the distribution been paid.
At the end of 2013 the group made an offer to shareholders to buy back all the PSPS securities, but holders of just 7.85% of the shares eventually accepted the deal.
Paperlinx shares had fallen 3.85% to A$0.025 at the time of writing. The group’s market cap was A$17.29m.
