PRESS DIGEST-Australian Business News - May 1
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 group of junior iron ore explorers has declared its support for Fortescue Metals Group's (FMG.AX) attempts to open up rail networks in Western Australia's Pilbara region. The North West Iron Ore Alliance said access to remote rail in the state would create a more viable industry. Stranded deposits would become viable, benefiting shareholders, the Federal Government, and local communities, some junior groups said. The move increases pressure on BHP Billiton (BHP.AX)(BLT.L) and Rio Tinto (RIO.AX)(RIO.L) to allow access to their Pilbara rail network. Page 17.
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China's state-owned Baosteel is believed to be interested in acquiring a significant stake in West Australian iron ore miner Fortescue Metals Group. Advanced negotiations with Baosteel over the sale of a 16.5 percent strategic stake in Fortescue ended earlier this year, but a China-based source said Baosteel was still keen to acquire the stake, which is held by United States fund Harbinger. Baosteel has signed up for 20 million tonnes of iron ore from Fortescue's Pilbara project, which is due to start production next month. Page 17.
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Capital gains tax liabilities (CGT) may influence Midwest Corp MIS.AX as it decides whether to accept a A$1.4 billion takeover offer from China's Sinosteel. Midwest deputy chairman David Law looms as a key figure in the takeover's success given his 13.1 percent shareholding, but he faces a significant CGT bill on his A$178 million worth of stock. The bid will succeed if more than 50 percent of Midwest's shareholders accept it, but analysts said nobody would do so without Mr Law's lead. Page 17.
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Lihir Gold (LGL.AX) remains confident of meeting production expectations this year despite reporting a 28 percent decline in production in the first quarter and an associated increase in cash costs. The lower output was due to a 17-day maintenance shutdown at its Lihir mine in Papua New Guinea, which also added A$7 million in costs. Despite this, Lihir expects the mine to produce between 700,000 and 770,000 ounces of gold this year. Meanwhile, Lihir says it is confident a A$1 billion merger with African-focused Equigold EQI.AX will be approved this month. Page 21.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Institute of Chartered Accountants and accounting firm Deloitte have called on the Federal Government to amend the taxes small companies pay on their profits. In a submission presented yesterday, companies with up to five shareholders -- typically with an annual turnover of less than A$3 million -- would pay tax on profits in the manner of sole traders or partnerships. The institute said the proposal would help smaller companies avoid the complexity of a system designed for larger corporations. Page 21.
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St George Bank SGB.AX has restructured its headline and trailing mortgage broker commissions in an attempt to protect itself from higher funding costs precipitated by the global liquidity squeeze. The base upfront commission will fall from 0.7 percent to 0.5 percent and the trailing commission will fall from 0.25 percent to 0.15 percent. 'We intend this to be a clear signal that we will continue to support the mortgage broking industry,' said St George acting retail business banking chief George Betty. Page 21.
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Australian Pharmaceutical Industries (API.AX) chief executive Stephen Roche says the health and beauty company is on track to improve its business in the second half after yesterday reporting a first-half net profit of A$6.15 million. 'API is comfortable with consensus forecasts of earnings before interest and tax of about A$49.5 million,' he said, as the company suffers from volatile retail conditions. Mr Roche also said API was interested in buying Primary Health Care's (PRY.AX) vitamins and wholesale drug distribution business. Page 21. Continued...
