PRESS DIGEST-Australian Business News - June 5
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)
A joint venture consortium involving billionaire James Packer's Crown Ltd (CWN.AX) has abandoned plans to build a A$5.5 billion casino and hotel complex in the United States. "The recent upheaval in credit markets has made it increasingly difficult…to develop a commercially viable project on what remains an attractive location on the Las Vegas strip," said chief executive Rowen Craigie. Crown, which had a 37.5 percent share in the consortium, will write off its A$44 million investment. Crown is 38 percent owned by Mr Packer. Page 19.
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Industrial and resources operations in Western Australia (WA) face a shortage of energy supplies after an explosion on Tuesday shut down a gas pipeline owned by Apache Energy. The blast severely disrupted production at Apache's gas processing facility on Varanus Island. Managing director Tim Wall said yesterday the company was focusing on "our people, the environmental side and getting the incident under control." Apache, WA's second-largest gas supplier, invoked force majeure clauses with major customers. Page 19.
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Tunnel operator Connector Motorways has posted a loss of A$9.86 million for the 12 months ended December 31, amid continuing underperformance by its Lane Cove Tunnel in Sydney. The company reported a loss of A$3.9 million a year earlier. Customer receipts of A$26.8 million and a A$20 million compensation from the New South Wales Roads and Traffic Authority failed to offset payments to Connector's contractors, suppliers and staff. Observers expect the Lane Cove Tunnel to be put up for sale. Page 21.
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Appliances conglomerate GUD Holdings (GUD.AX) has sold its iconic Victa lawnmower brand to United States-based engine maker Briggs & Stratton for A$23 million. More than 7 million Victa machines have been sold in Australasia since 1952. Managing director Ian Campbell blamed increasing competition from Chinese imports and the prolonged drought for the move. He said Briggs & Stratton, from which Victa engines were sourced, made an offer for the lawnmower business three months ago. Page 23.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Securities Exchange (ASX) said yesterday that its probe into broker Tricom could take up to a year to complete. The investigation was sparked by Tricom's failure on January 29 this year to settle on time trades worth A$84 million. "When you have breaches of matters that are quite complex…they are quite involved investigations," said ASX supervisory head Eric Mayne. Meanwhile, Danish bank Saxo is expected to take a 35 percent stake in Tricom at the end of a due diligence process. Page 21.
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Chinese steel trader Sinosteel has bought 16.2 million shares of takeover target Midwest Corporation MIS.AX from a party believed to be Malaysian-based investor Vital Rays Investment. The move lifts Sinosteel's stake in the West Australian iron ore miner to more than 28 percent -- a development that may have implications for rival bidder Murchison Metals' (MMX.AX) reverse takeover proposal for Midwest. Sinosteel had offered A$6.38 per share for Midwest, but the Murchison deal valued Midwest at more than A$7 per share. Page 22.
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Funds manager Basis Capital's Aust-Rim fund has secured A$37 million from its offshore feeder fund, the Pac-Rim Opportunity Fund. Basis Capital was engulfed in a crisis last year when the United States sub-prime crisis triggered a collapse in the value of two of its funds, including the Aust-Rim fund, originally worth A$355 million. "This is an important development as it lays the foundation for Basis Capital…to return some capital to Aust Rim Fund unitholders in the future," the Sydney-based fund said in a note to investors yesterday. Page 23. Continued...
