PRESS DIGEST-Australian Business News - Feb 25

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy.

THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)

Listed fund Babcock & Brown (B&B) Infrastructure's (BBI.AX) asset sale and debt repayment plans are facing further difficulties following a delay in the sale of a 50 percent stake in New Zealand's Powerco. Queensland Investment Corp, which agreed to buy Powerco in November, has forced B&B Infrastructure to restart negotiations, although both sides expect the sale to proceed in coming days. The sale of Powerco had been expected to provide B&B Infrastructure with around NZ$400 million. Page 47.

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Australian travel group Flight Centre (FLT.AX) yesterday released its first-half results, with net profit down 57.4 percent to A$26.1 million. The company also cut its interim dividend from A37.5 cents last year, to A9 cents. Chief executive Graham Turner said that although sales are expected to remain weak for some time, "we are quietly confident the next 12 months will slowly pick up." Mr Turner said the company was looking to make further cost cuts, but there are no plans to cut sales staff. Page 47.

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Australian miner Gloucester Coal (GCL.AX) has been criticised for agreeing to a merger with Whitehaven Coal (WHC.AX) that does not allow Gloucester to consider rival offers. The criticism comes from Gloucester's largest shareholder, Noble Group, with Noble Energy director William Randall saying the deal "eliminates the opportunity for shareholders to opine in the future direction of the company." Gloucester chief executive Rob Lord last week rejected accusations that the deal was structured to prevent Noble influencing the process. Page 47.

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Australian port and rail infrastructure owner Asciano (AIO.AX) will release its first-half results this morning, and is likely to face criticism over the company's failure to sell assets and pay down debt. Chief executive Mark Rowsthorn is expected to assure investors that sales will occur by the end of the financial year. Asciano is believed to be attempting to sell stakes in its Pacific-National coal-haulage business as well as its ports business. Asciano shares yesterday fell 7.5 percent to close at A55.5 cents. Page 47. --

THE AUSTRALIAN (www.theaustralian.news.com.au)

Shares in Australian investment bank Macquarie Group (MQG.AX) yesterday fell 4.5 percent to close at A$19.01, the lowest level since October 2002. A major shareholder, the United States fund Capital Group Companies, also revealed that it had reduced its holding in Macquarie by 3 million shares in the past month, reducing its stake to 5.16 percent. The falling value of Macquarie comes as a number of its satellite funds have reported losses, including Macquarie CountryWide Trust and Macquarie Media (MMG.AX). Page 27.

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Australian iron-ore company Fortescue Metals Group (FMG.AX) yesterday agreed to a deal with Chinese steelmaker Hunan Valin Iron & Steel which will see Hunan invest around A$1 billion in the miner, and give the Chinese company a 15 percent stake in Fortescue. Fortescue chief executive Andrew Forrest said the deal would help Fortescue reach its goal of raising over A$3 billion to fund an increase in the company's Pilbara iron-ore exports to levels similar to those of BHP Billiton. Page 27.

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Australian listed property trust Macquarie CountryWide Trust (MCW.AX) yesterday reported a first-half net loss of A$714 million, including a 10 percent, or A$600.8 million, reduction in property values over the past six months. The company also announced it would sell A$548 million worth of property to reduce debt and lower its current gearing level of over 58 percent to below 50 percent. Chief executive Steven Sewell said the company intends to now "focus our energies on the Australia and New Zealand portfolios." Page 28.

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