Companies: PPA   

Pan Pacific Aggregates (PPA) has had its AIM quote suspended at 1.62p and Hanson Westhouse has resigned as nominated adviser.

Bombed-out PPA, headed by ex-English China Clays luminary William Voaden, says banking group HSBC, provider of equipment leases for its newly-acquired Pumptown granite quarry in the Canadian province of British Columbia, has told the company it intends to seize and re-sell the equipment. That is because of outstanding liabilities of at least £126,000 on the equipment leases and a further requirement by the bank for a £95,000 security payment.

PPA bought Pumptown from the CNI group, controlled by local developers Herb and Steve Dunton, as the key plank in its recovery strategy. The company paid with shares and £200,000 cash in a deal which gave the Duntons a 42 per cent PPA stake and board seats.

PPA, which recently raised £1 million at 1p through Voaden’s own broking group VSA Capital, insists the purchase agreement included the transfer of the equipment leases on a ‘free and clear basis’, without these liabilities attached. The company says its lawyers have served notice on CNI for breaches of the agreement terms.

According to PPA, HSBC has also asked it to become a guarantor of the leases. But, ‘with no prospect of immediate income from the quarry’, it has been unable to agree to give the undertakings HSBC requires.

PPA has also learnt from consulting engineers that it will take up to 18 months to strengthen the bridge on the road to Pumptown to take quarry traffic anyway. After this sorry chapter, the company’s shares, floated three years ago at 80p, have been suspended at a barely visible 1.62p.

Last month, Growth Company Investor suggested PPA would merit a significant re-rating ‘if the deals go through as planned’. They clearly have not and many questions remain to be answered.

Pan Pacific Aggregates	AIM	£0.72m	0.25p	-0.08p
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Other company articles:
PPA perseveres			02/10/2008
PPA back to AIM			29/09/2008
Crisis hits PPA			29/08/2008
Pan Pacific Aggregates			08/07/2008
PPA builds for recovery			20/06/2008