PRESS DIGEST-Australian Business News - March 10
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)
Gaming machine manufacturer Aristocrat Leisure (ALL.AX) expects the gaming sector will undergo a round of consolidation, once 'there is a glimmer of an upturn.' Chief financial officer Simon Kelly said industry players were not yet moving due to fears that 'it's going to be cheaper tomorrow.' Mr Kelly said Aristocrat intends to take advantage of such consolidation, with company chairman David Simpson yesterday emphasising the strength of Aristocrat's balance sheet. Page 15.
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Donald McGauchie, chairman of telecommunications company Telstra (TLS.AX), will soon start meeting with candidates seeking to replace current chief executive Sol Trujillo, who is due to leave at the end of June. Corporate recruiter Egon Zehnder is believed to have helped Telstra's board to create a shortlist of less than 10 candidates. Mr McGauchie is to meet a number of external candidates, with the most likely internal candidate believed to be finance director John Stanhope, according to analysts. Page 15.
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Mining company Rio Tinto (RIO.AX)(RIO.L) yesterday signalled the sale of its Jacobs Ranch coalmine in the United States to US miner Arch Coal Inc for US$761 million. The sale is part of the company's continuing asset sales program, with US$2.5 billion divested so far this year. Rio last month agreed to a US$19.5 billion partnership with Chinese aluminium company Chinalco, pending approval by the Foreign Investment Review Board and Rio shareholders. Page 16.
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Shareholders in mining explorer Jupiter Mines (JMS.AX) have approved a deal which will give Pallinghurst Resources and Red Rock Resources a combinedp 55.5 percent stake in the company. Pallinghurst and Red Rock are owned by former BHP Billiton chief executive Brian Gilbertson, who is expected to join the board of Jupiter. Although the deal was supported by Jupiter directors, independent expert Lonergan Edwards and Associate had assessed the deal as neither fair nor reasonable. Page 16.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Fear of further turmoil in the global financial system has led to corporate Australia's credit risk reaching an all-time high, with credit default swap spreads, which indicate the cost of insuring debt, trading at 432 basis points on the local iTraxx index. The largest movements have been among Australia's banks, with the debt of the four major banks now trading at 205 basis points, around 20 times wider than in 2007. The widening domestic spreads are following movements overseas, particularly the United States. Page 17.
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Perth-based mining company Fortescue Metals Group (FMG.AX) yesterday agreed to a deal with China's Hunan Valin Iron & Steel, which gives Fortescue A$86.8 million in return for 35 million newly issued shares. The deal is the second with Valin, which in February paid A$558 million for a 16.5 percent share in the iron ore company. Fortescue intends to increase iron ore sales to Valin's businesses four-fold, as the miner expands production from its operations in West Australia's Pilbara region. Page 18.
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Pankaj Oswal, the managing director of ammonia producer Burrup Fertilisers, is reported to have cancelled plans to build a A$1.5 billion solar energy plant in Western Australia's Pilbara region. Mr Oswal first spoke of building the solar plant in mid-2008, and had entered a non-binding memorandum of understanding with Horizon Energy to conduct a feasibility study. It is believed the project may be moved to South Australia's Coorong shire, 100 kilometres south-east of the state capital, Adelaide. Page 18. Continued...
