PRESS DIGEST-Australian Business News - July 2
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)
-- Infrastructure asset manager Hastings Diversified Utilities Fund (HDF.AX) plans to raise A$250 million through a capital raising to repay debt and help fund expansion of its Epic gas pipeline. The move cancels the sale process for the gas pipeline business, which has attracted proposals from 16 groups since it was started at the beginning of last month. The decision by Hastings has won approval from investors, with one analyst saying, "they're on the right path." Page 17.
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Department store retailers David Jones (DJS.AX) and Myer have seen better than expected demand from consumers, leaving them searching for stock to sell during the current year-end clearance sales. Retailers are sourcing merchandise from Asian manufacturers left with excess stock due to poor demand from the United States, and are taking advantage of lower freight rates. Myer managing director Bernie Brookes says that until now retailers have been reducing inventory due to poor sales expectations. Page 17.
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Consumer electronics retailer Clive Peeters (CPR.AX) yesterday issued a profit warning, saying it expects a pretax loss of between A$4.5 million and A$5 million for the 2009 financial year. However, the company also forecast a return to profitability this year, with managing director Greg Smith saying "the worst is over because we've re-engineered the model and our assumption for 2010 is based on no improvement in retail conditions." Mr Smith said the retailer would continue to seek new capital, but added that it is not "a major focus." Page 17.
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The former chief executive of Fairfax Media (FXJ.AX), David Kirk, has been appointed executive chairman of cinema group Hoyts. Mr Kirk yesterday said that "there are good opportunities to grow this company," which currently has a 21 percent share of the sector, behind market leader Village Roadshow-Greater Union, which has 45 percent. The company is owned by private equity firm Pacific Equity Partners, and Mr Kirk is believed to have taken a small stake in the cinema group. Page 18.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
-- Iron ore mining companies BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) yesterday said talks with the China Iron & Steel Association (CISA) on benchmark price for iron ore fines have resumed, as China seeks to avoid the collapse of the benchmark system. Until now the CISA has been demanding cuts to the price of between 40 percent and 45 percent, greater than the 33 percent cut which has been agreed to by Japanese and South Korean steelmakers. Despite the cuts, the price of around US$61 a tonne is still the second-highest on record. Page 17.
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A proposed liquefied natural gas plant in Western Australia's Kimberley region is becoming less likely following speculation that the forecast cost of the project has increased to A$50 billion. Adding to the uncertainty, partners to the project's leader, Woodside Petroleum (WPL.AX), are believed to be questioning the necessity of the plant, and are considering the option of processing gas at an existing facility at Karratha. Woodside, which has a 50 percent stake in the project, has previously said it hopes to start construction in 2013. Page 17.
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Taxi payment services company Cabcharge (CAB.AX) has been questioned over claims a courier-delivered envelope to the company, containing official notice of a multi-million dollar lawsuit by the Australian Competition and Consumer Commission, went unnoticed for more than three hours. The Australian Securities Exchange has asked the company to explain why it claimed it was unaware of the legal proceedings shortly after 3 pm last Friday, when the documents were served at midday. Page 17. Continued...
