PRESS DIGEST-Australian Business News - May 21
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)
Major Australian mining companies BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) are expected to finalise iron ore contract prices with Japanese and Korean steel mills within days, with the result likely to significantly decrease Australia's terms of trade. Steel makers from the two countries are believed to be pushing for a 40 percent lower contract price compared to last year's record US$90 a tonne, although analysts say the mills are likely to accept a cut of around 35 percent. Page 14.
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Oil and gas company Santos (STO.AX) is selling four projects in the Bonaparte Basin region off the coast near Darwin, with expectations the sale could provide the company with several hundred million dollars. Final bids for the gas projects are due in early June, and sales may be finalised within weeks. Analysts say the assets are likely to attract interest from multinational energy companies such as Eni, ConocoPhillips, Royal Dutch Shell and Inpex, as well as a number of Chinese companies. Page 15.
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Rob Murray, the chief executive of beer and wine producer Lion Nathan LNN.AX, yesterday indicated that the company is likely to sell its wine business, although a sale is unlikely to occur for at least two or three years, when the market has improved. "There's still an opportunity to sell these businesses for a lot more than you're likely to get for them now, and now is not the time," Mr Murray said. The company has spent around A$400 million buying wine assets since 2001, which have since been written down in value by A$279 million. Page 15.
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Queensland toll-road operator BrisConnections yesterday released a revised list of its 20 largest investors, with Macquarie Group holding 35 percent of the trust's units, while Queensland Investment Corporation now holds a 34 percent stake. The new list excludes those investors who have not paid the second instalment on the company's partly-paid units, with BrisConnections still owed around A$280 million. BrisConnections will auction the unpaid units next month. Page 15.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Building materials company James Hardie Industries (JHX.AX) yesterday announced full-year profits to the end of March. Although net profit reached US$136.3 million, compared to a US$71.6 million loss for the previous year, operating profit fell, and chief executive Louis Gries said the United States housing sector, James Hardie's major market, "is not bottoming and there is worse to come." Mr Gries also announced that a final dividend would not be paid, and future dividends are on hold. Page 17.
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Surfwear group Billabong International (BBG.AX) yesterday completed the institutional portion of its A$290 million capital raising, raising A$230 million through a two-for-11 entitlement offer at A$7.50 a share, a 29 percent discount to the stock's last closing price before the raising. The company will now undertake a $60 million raising from retail investors. Billabong will use the funds to reduce its gearing level from 42 percent to less than 30 percent. Page 17.
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Mining company Iluka Resources (ILU.AX) yesterday announced that the South Australian (SA) Government has approved the mining and rehabilitation plan for its zircon project in SA. The approval allows the mineral sands miner to commence mining and processing, with Iluka saying it expects production to start in the first quarter of 2010. The A$420 million project will produce at least 300,000 tonnes of zircon annually once operating, accounting for 40 percent of the company's output from 2011. Page 18. Continued...
