PRESS DIGEST-Australian Business News - May 28
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)
Mining company OZ Minerals (OZL.AX) has been presented with alternative proposals for recapitalisation, only two weeks before shareholders are due to vote on the company's planned US$1.2 billion deal with metals trading company China Minmetals. Financial services firm Morgan Stanley, with support from RBC Capital and RFC Group, last week offered to underwrite a US$1 billion capital raising, according to analysts. OZ would not comment on the offer, but said the board was obliged to consider any serious proposal. Page 16.
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Petrol refiner Caltex (CTX.AX) yesterday announced the acquisition of 302 petrol stations from ExxonMobil XOM.AX, increasing the number of sites owned and operated by the company to 602. Chief executive Des King also announced that Caltex will invest A$180 million in upgrading its retail network, saying "this is a platform for growth for us." Analysts say that although Caltex currently has 33 percent of the wholesale petrol market, it has been a relatively minor player in the retail market until now. Page 16.
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Clothing and footwear retailer Colorado Group is close to finalising the restructure of A$230 million in senior debt. Analysts say the private equity-owned company's lenders appointed accounting firm Deloitte to undertake due diligence on the business earlier this year after breaching debt covenants. Colorado chairman Bob Dalziel yesterday said that Deloitte had completed its work with the company more than two months ago, but would not comment on whether lenders have agreed to a restructure of the company's debt. Page 16.
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Mining company Rio Tinto's (RIO.AX) chairman, Jan du Plessis, will today meet major institutional shareholders in Melbourne to discuss the company's proposed US$19.5 billion deal with Chinese resources company Chinalco. Analysts say a number of investors are opposed to the deal, believing that the sale of key assets to Chinalco will reduce the miner's long-term value. In a new interview with a Chinese magazine, Chinalco president Xiong Weiping said "we and Rio are together looking into the present situation." Page 17.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Banking and insurance group Suncorp (SUN.AX) has criticised the Federal Government's wholesale funding guarantee, saying it creates an unfair market. Access to the guarantee costs Australia's top four banks a 70 basis point premium, while smaller institutions, without an AA credit rating, pay 100 basis points. The bank's acting chief executive, Chris Skilton, said the difference in funding costs would decrease competition in the sector. Page 17.
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Queensland businessman Clive Palmer, owner of the proposed Waratah Coal project in the state, says he can start construction on the A$6.5 billion project early next year if government approvals can be secured. Mr Palmer yesterday said the Metallurgical Corporation of China has agreed to take a 10 percent stake in the project, along with an agreement to purchase 30 million tonnes of coal each year over the project's 25-year lifespan. Mr Palmer claimed the project will create 6,000 jobs during construction, and 1,500 ongoing jobs. Page 17.
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Mining company Fortescue Metals Group (FMG.AX) has reached an agreement with freight company Classic Maritime over a disputed shipping contract. Fortescue cancelled the contract late last year after a sharp decline in iron ore spot prices. The miner has now agreed to extend its contract with Classic by five years, with rates linked to a freight index. The deal is the second settlement Fortescue has made over suspended shipping contracts, with a further five contracts still in dispute. Page 18. Continued...
