PRESS DIGEST-Australian Business News - Jan 7
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)
Moves by the directors of manganese miner OM Holdings (OMH.AX) to change the company's constitution have been criticised by the company's largest shareholder, Consolidated Minerals (ConsMin). OM, which is seeking to amend company by-laws to give the company protection against hostile takeovers under Australian law, acknowledges the reforms are a reaction to ConsMin increasing its stake. ConsMin has accused OM of using the holiday period to push through the changes without proper scrutiny. Page 12.
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New Zealand discount retailer Warehouse Group (WHS.NZ), in which Australian retailer Woolworths (WOW.AX) has a 10 percent stake, yesterday reported that sales for the 10 weeks to January 4 fell 2.5 percent compared with the same period last year. However the company also said profit margins had remained similar to the previous year. Same-store sales fell just 1.9 percent during the period, a better result than some analysts had expected. Warehouse Group generates around 40 percent of its annual earnings in the quarter covering Christmas and January. Page 12.
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Nickel laterite explorer Jervois Mining (JRV.AX) is seeking to raise A$1.7 million through the issue of shares at a price of just A0.4 cents a share. The issue is the latest in a number of low-priced, dilutive raisings by the company, which has issued around 680 million shares over seven raisings since March 2006. The miner intends to use the funds to continue developing a number of projects, including its flagship nickel project at Young in central New South Wales, where it is looking for economic processing techniques. Page 12.
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White Energy (WEC.AX), a Sydney-based company which has an exclusive license to use technology developed in Australia which improves the burning efficiency of low grade coal, is to build an A$80 million facility in the United States. The deal, with Buckskin Mining, will create a facility producing binderless coal briquettes which White Energy says can produce 35 percent more thermal energy than the original, low grade, sub-bituminous coal. White Energy is already building a similar facility in Indonesia. Page 12.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Shares in Babcock & Brown BNB.AX rose 54 percent yesterday as the beleaguered investment bank called on its international banking syndicate to approve its debt-for-equity swap restructuring plan. The banking syndicate, headed by Australia's four major banks, has already provided a A$150 million loan to keep the company afloat. A decision on the plan, which would essentially give the banking syndicate financial control of Babcock & Brown, is expected by Friday. Page 25.
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Gas and electricity retailer AGL Energy (AGK.AX) has secured a 54 percent stake in gas exploration company Sydney Gas following its A$187 million cash takeover bid launched at the end of 2008. AGL's friendly takeover was aimed at securing the rights to become the sole operator of the prospective Hunter coal seam gas project, which it owned in partnership with Sydney Gas. AGL anticipates that extra drilling at the Hunter project will add a further 500 petajoules of gas to its proven or probable gas reserves. Page 27.
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Australian homeowners are expecting the value of their property to fall in the next quarter, according to a new survey by the Mortgage and Finance Association of Australia (MFAA) and BankWest. Western Australia recorded the greatest number of respondents forecasting a fall in property prices, followed by Victoria, New South Wales, Queensland and South Australia. MFAA chief executive Phil Naylor said it was the most pessimistic response the Home Finance Index had recorded regarding property price expectations since it began in 2006. Page 27.
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The spread on 10-year New South Wales state government debt, compared with the Federal Government's 10-year bond, has retreated to 96 basis points, following a blowout in the semi-government bond market precipitated by the Federal Government's recent decision to guarantee Australian banks. Macquarie Bank's head of debt market research, Stephen Maher, says a new equilibrium in semi bond pricing had been reached. Page 27.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Oil and gas explorer Range Resources (RRS.AX) is awaiting the outcome of presidential elections in Somalia's semi-autonomous state of Puntland before officially launching its A$3 million rights issue. Range Resources is undergoing the capital raising to fund further exploration in Puntland, in which it has secured exclusive oil and mineral rights under the state's current President, Mohamud Musse Hersi. Mr Hersi's challenger is a vocal critic of Range Resources' current agreement. Page 23.
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Macquarie Media Group (MMG.AX) has agreed to swap its 50 percent stake in Darwin Digital Television, jointly owned with PBL Media, for a half-stake in Prime Media Group's Mildura Digital Television. The deal, which is dependent on clearance by the Australian Competition and Consumer Commission, follows last year's Federal Court decision to uphold an order by the media regulator that forces Macquarie to sell its interests in digital television stations in Darwin and Tasmania by January 19. Page 23.
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Collapsed retailer Herringbone has been put up for sale by insolvency firm BRI Ferrier two weeks before its next creditors' meeting. The upmarket retailer, founded by John Mutton and Matthew Jensen, collapsed after it was unable to pay A$4 million in debt secured to expand the business. "It needs an investor or a trade sale to finance the business and move on," administrator Martin Green said yesterday. Offers for the business, which remains a going concern, are due by January 19. Page 24.
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The Australian dollar surged to a 12-year high against the British pound yesterday, rising to 49.41 pence in morning trade. The resurgence of the Australian currency is partly attributed to a rebound in commodity markets, according to analysts. Also, Britain is suffering from a declining housing market, job losses and a fall in consumer spending. Australian house prices have remained resilient to the global financial crisis, while Britain has recorded a 14 percent fall in house prices over the last year. Page 24.
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THE AGE (www.theage.com.au)
National Australia Bank's (NAB) (NAB.AX) British businesses could fetch up to A$7 billion, according to analysts. Speculation that NAB was considering selling its British operations, which includes Glasgow-based Clydesdale Bank, increased following recent comments by new NAB chief executive Cameron Clyne that indicated he would focus on the group's Australian operations. Deutsche Bank said there was no strategic imperative for NAB to hold onto the British businesses which generated slightly over 18 percent of the group's total earnings last year. Page 21.
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The overseas operations of accounting software firm MYOB MYO.AX will be reviewed following the A$450 million takeover bid by the Archer Capital-led consortium. The joint venture between Archer and United States investment firm HarbourVest Partners has stated it will look at MYOB's operations in New Zealand, Malaysia, Singapore and Hong Kong. MYOB said yesterday that the A8.15 cents franked special dividend to be paid once the consortium reached acceptances of over 90 percent would be sent out on February 6. Page 21.
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Australian fund management companies have joined with those in the United States and Britain in calling for global regulators to ease back on short-selling reporting requirements. The Investment and Financial Services Association has agreed to be part of a declaration to be released today that argues the new short-selling daily disclosure rules simply reveal other investors' trading strategies, and calls instead for the data to be published on a periodic, but sufficiently delayed basis. Page 22.
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