PRESS DIGEST-Australian Business News - July 9
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)
Discount retailer The Reject Shop (TRS.AX) has signalled that it will step up its store expansion plans following speculation that shops owned by its rival, Australian Discount Retail, will be closed after it comes out of receivership. The Reject Shop has previously outlined a long-term aim of opening a further 230 stores in addition to the 170 it currently operates. Industry sources estimate that up to 40 stores operated by ADR may be closed by its new owner, businesswoman Jan Cameron. Page 18.
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Building materials manufacturer CSR (CSR.AX) has said that it will take a couple of months to finalise details of the planned sale of its sugar business, with the company yet to work out how to split its A$1.2 billion of debt. Investors were hoping that the company would clarify its plans for the demerger at today's meeting. However, managing director Jerry Maycock said yesterday that the degree of volatility from earnings and capital markets made the process that much harder. Page 19.
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Electricity distributor Envestra (ENV.AX) said yesterday that it had refinanced around A$300 million of debt due this year with its banking syndicate. Envestra negotiated a A$280 million loan with a five-bank syndicate, while Australia and New Zealand Banking Group (ANZ.AX) agreed to convert a one-year A$50 million working capital facility into a A$75 million three-year facility. "Over the next five years the majority of capex will be internally funded," said chief executive Ian Little. Page 19.
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Qantas Airways (QAN.AX) has warned that it may have to make further cuts to its capacity due to increasing competition and falling demand. The carrier, which has already been forced to cut its flying capacity by 5 percent and shed 1750 workers, is expected to come under further pressure following the addition of two more carriers on the profitable route between Sydney and Los Angeles. "If you get a chance to get great airfares with Qantas, grab them while they last," chairman Leigh Clifford said yesterday. Page 21.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
A former satellite of failed investment bank Babcock & Brown yesterday announced that it has recorded a 99 percent loss on an investment in Israel's yellow pages directory business. Eircom, formerly known as Babcock & Brown Capital, purchased Israel's Golden Pages in August 2007 for A$143.3 million, and will receive just A$1 million for the business following a debt restructure which will see control given to the directory company's bondholders. Page 17.
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Federal Treasurer Wayne Swan has dismissed speculation that the Government was considering a major systematic review of the financial system following a meeting last month with the nation's top bank chiefs. The heads of the Big Four banks had requested a meeting with the Treasurer to address concerns they had over the level of legislation being pushed through Parliament without consultation, including a softening of the personal bankruptcy law. Page 17.
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Transpacific Industries (TPI.AX) admitted yesterday that past earnings were inflated with undisclosed one-off items, including profits on the sale of land and a reversal in a remediation provision. The waste management company, controlled by Terry Peabody, only revealed the items after an independent due diligence process was completed. Transpacific is attempting to raise A$800 million with new investor, United States private equity group Warburg Pincus, as part of an equity raising to cut heavy debt levels. Page 17. Continued...
