Paperlinx plans to alter its capital structure after revealing it wants to buy back its hybrid securities.

The paper merchant announced it was "in the process of constructing a formal offer to acquire the hybrids, which it expects to be in a position to announce in November".

Paperlinx raised $285 million in 2007 with an issue of hybrid securities at $100 each. It is obliged to buy back the hybrids if it wishes to alter the company's capital structure.

The value of the hybrids has plummeted since 2007. Paperlinx PIGS, which represents some hybrid holders, warned them in December 2012 that Paperlinx would try to buy them out with a lowball offer.

Paperlinx said it had received "strong support" from hybrid holders and ordinary shareholders since announcing it August that it was "exploring a potential scrip-based merger".

The company said then that any merger would "accelerate Paperlinx's ability to successfully implement an operational turnaround", "improve confidence among key stakeholders" and "deliver a transparent capital structure".

[Related: Ups and downs of Paperlinx]

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