PRESS DIGEST-Australian Business News - June 30
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)
Timber company Gunns has narrowed its search for a partner for its pulp mill project in Tasmania's Bell Bay. "Gunns has now made a decision to proceed with one company to develop a joint-venture agreement for the project, and is moving forward positively with the preferred partner on that basis,' the company said yesterday in a statement to the Australian Securities Exchange. Gunns has not yet identified the partner but analysts believe it is likely to be Swedish pulp and paper group Sodra. Page 15.
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West Australian conglomerate Wesfarmers (WES.AX) has sold 6 percent of its Coles supermarkets as part of a strategic review of its supermarket network. Coles said yesterday that 45 of its smaller supermarkets and eight Liquorland stores, with total sales revenues of A$450 million, would be transferred to independent retail group FoodWorks. Coles managing director Ian McLeod said "our focus is on the larger stores as we develop a turnaround of the business, because that is where we get the most effective return.' Page 15.
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Paper merchant PaperlinX PPX.A has appealed for federal help in its bid to save two struggling pulp mills in north-western Tasmania. The plants at Burnie and Wesley Vale were left out of a Japanese buy-out of the company's Australian Paper operation in February and are suffering "unacceptable financial loss in the current environment,' according to PaperlinX chief executive Tom Park. However, analysts say the government will want to ensure that the money "goes towards making the mills competitive and profitable.' Page 15.
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Transport company Toll Holdings (TOL.AX) is looking for opportunities to extend into the resources sector. Toll yesterday signed a A$180 million deal with United States oil and gas giant Chevron's Australian operation to manage logistics and a supply base for the A$50 billion dollar Gordon project on Barrow Island. Toll managing director Paul Little said takeovers would continue in the A$200 million to A$300 million range. "The resources sector is in very strong shape at the moment,' Mr Little said yesterday. Page 16.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Prudential Regulation Authority (APRA) has called on banks to adopt the same methods to manage their "resilience reserves' as used by the life insurance industry. According to APRA general manager David Lewis, "a more forward-looking approach to reserve offers considerably more hope of better positioning bank balance sheets to cope with inevitable expansions and contractions in economic activity.' The recommendation by APRA is in direct opposition to international financial reporting standards adopted by Australia four years ago. Page 17.
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Managed investment scheme Timbercorp (TPF.AX) and its subsidiary Timbercorp Securities will be wound up following creditor meetings in Melbourne yesterday. Administrator KordaMentha experienced no difficulty in persuading creditors to wind up Timbercorp. However, the later meeting of Timbercorp Securities lasted nearly three hours, with many investors complaining of being left in ignorance about the status of their investments. "We're not going to please everybody. We know that,' said KordaMentha principal Mark Korda. Page 17.
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The Australian Competition and Consumer Commission has given approval for Japan's Kirin Holdings to acquire the remaining 53.87 percent of shares in Australian brewer Lion Nathan which it does not already own. "Lion Nathan notes that the satisfaction of the remaining conditions precedent to the implementation of the scheme is in progress,' Lion Nathan yesterday said. However, the takeover deal requires at least 75 percent support from shareholders in Lion Nathan who have no interest in Kirin. Page 19. Continued...
