PRESS DIGEST-Australian Business News - June 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)
A shortlist of bidders has been compiled by adviser Citigroup (C) for the sale of food manufacturer Goodman Fielder's (GFF.AX) commercial fats and oil business. Goodman is seeking between A$300 million and A$400 million from the sale, however analysts believe the scarcity of bidders will make achievement of this price unlikely. The fats and oils business is being divested as part of a strategic review to reposition Goodman as capable of delivering annual earnings growth of at least seven percent. Page 18.
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Essential services provider United Group has extended the contract of chief executive Richard Leupen, but at a reduced rate of pay. Mr Leupen has overseen eight consecutive years of profit growth and is regarded by analysts as a strong asset for the company. However, United has faced criticism of overpaying for his services. Mr Leupen's contract was due to expire in 2011 and has now been extended to 2014, but with a pay cut of A$500,000 a year in his base salary. Page 18.
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Television broadcaster Ten Network (TEN.AX) has pointed to its growing ratings share as as a major positive to come out of a year that has seen its full-year earnings plunge. Executive chairman Nick Falloon said that he expected the recent success of newly launched programs to start to lift advertising revenue during the August quarter. 'Each of these properties has now demonstrated their worth and they're attracting considerable interest and investment,' Mr Falloon said yesterday. Page 19.
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Investment firm Co-Investor Capital Partners has purchased A$13 million of debt belonging to marketing services group CommQuest and agreed to invest a further A$3 million in the company. The payment of loans owed to the Australia and New Zealand Banking Group has halved CommQuest's debt, and in the next three to four months the investment will be converted into equity through a rights issue. In explaining Co-Investor's move yesterday, managing director Roger Sharp said CommQuest was a case of 'good business, bad balance sheet.' Page 19.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Competition and Consumer Commission yesterday granted temporary permission to jointly market domestic gas from the Gorgon liquefied natural gas project in Western Australia (WA), despite the objections of customers. Gorgon participants Chevron, Shell and Exxon Mobil had faced objections from big gas buyers Alcoa and Wesfarmers who claimed their commercial positions would be substantially weakened by a joint marketing agreement. Page 18.
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Mining fund Lion Selection (LST.AX) yesterday announced major restructuring plans that include the sale of its stake in Newcrest's (NCM.AX) Queensland Cracow gold mine for A$35 million. Following the sale of its Newcrest stake, Lion intends to list its residual, non-gold assets on the National Stock Exchange and then merge with gold producer Catalpa. Lion said the demerger and sale would unlock value in its stock which has been considered by analysts to be trading at half of its net asset value. Page 18.
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A land access agreement has been signed between miner Iron Ore Holdings (IOH) (IOH.AX) and native title holders for the miner's Central Pilbara iron ore projects in Western Australia. IOH, which is controlled by media entrepreneur Kerry Stokes, said yesterday that it had reached an agreement to pay the Innawonga and Bunjima people an undisclosed amount up-front and then royalties. Both IOH and the Pilbara Native Title Service declined to release full terms of the deal, claiming it was commercial in confidence. Page 18 . Continued...
