PRESS DIGEST-Australian Business News - May 6
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)
The third export coal terminal in Newcastle, New South Wales, is facing significant delays, which may prevent the terminal from reaching its annual capacity of 33 million tonnes by six to 12 months. Dredging at the site is yet to start due to contamination from the old steelworks nearby, without which capesize class vessels will be unable to use the terminal. The project, which is being constructed by the Newcastle Coal Infrastructure Group, is currently due to load its first ship by March next year. Page 48.
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Singapore-listed commodity trader Noble Group (NOBG.SI) yesterday increased its takeover offer for mining company Gloucester Coal (GCL.AX) by 24 percent to A$6 a share, or A$500 million in total. Noble increased its bid in an effort to prevent a merger between Gloucester and rival Whitehaven Coal (WHC.AX). Although the board of Gloucester had previously determined that Noble's original takeover bid of A$4.85 was inferior to the proposed merger with Whitehaven, the board will have to consider Noble's increased offer. Page 48.
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Administrators to collapsed forestry and horticulture investment group Timbercorp yesterday held creditor meetings in Melbourne, with administrator Mark Korda saying that a number of the investment schemes "aren't viable." Mr Korda said the company would today lodge an application in the Federal Court to use A$12 million in funds to harvest olive crops over the next seven weeks, saying "we think the deal's commercial." Timbercorp owes secured creditors A$661 million, with a further A$14 million owed to unsecured creditors. Page 49.
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West Australian Newspapers (WAN.AX) yesterday announced results for the nine months to the end of March. Chief executive Chris Wharton cut the company's full-year net profit forecast to between A$93 million and A$98 million, down from expectations announced three months ago of between A$100 million and A$108 million. However, Mr Wharton said falls in advertising revenue have stabilised, saying "while no turnaround is yet apparent, no further decline is expected." Page 50.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Steelmaker BlueScope Steel (BSL.AX) yesterday announced it is to undertake a A$1.413 billion raising from shareholders on a pro-rata basis at A$1.55 a share, a 40 percent discount to the company's last traded price. BlueScope also said it has secured new bank loan facilities of A$1.27 billion. Chief executive Paul O'Malley said the funds from the raising and the new loans would be used to refinance A$2.09 billion of debt to beyond January 2012. Mr O'Malley said the raising will leave the company in "a very strong financial position." Page 21.
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Oil and gas producer Woodside Petroleum's (WPL.AX) chief executive officer Don Voelte has criticised the Federal Government's emissions trading scheme (ETS), saying the changes to the scheme announced this week still fail to acknowledge the importance of gas exports. Mr Voelte said that liquefied natural gas (LNG) is "part of the solution" to climate change. Mr Voelte said that the scheme, even with the recent changes, risks halving the size of the LNG sector from what it would otherwise be in 2030. Page 21.
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Andrew Michelmore, the chief executive of mining company OZ Minerals (OZL.AX), is to become the manager of the Australian division of China Minmetals. Minmetals recently purchased the majority of OZ's assets in a US$1.2 billion rescue package, although the deal is still to be approved by OZ shareholders. Mr Michelmore will remain as chief executive of OZ Minerals until the deal with Minmetals is completed, and yesterday said he would remain a shareholder in the company. Page 21.
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Media group APN News and Media (APN.AX) has announced its second profit downgrade in less than three months as a slump in the advertising market continues to hit the media sector. Chairman Gavin O'Reilly told the company's annual general meeting yesterday that net profit after tax for the year to December 2009 would be up to A$20 million less than the previously forecast A$120 million. Mr O'Reilly said "the way it looks at the moment it's going to be July or August before we see any improvement." Page 21.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Lawyers for the Australian Securities and Investments Commission yesterday told the Federal Court in Perth that Fortescue Metals Group (FMG.AX) chief executive Andrew Forrest had stopped referring to contracts with Chinese companies as "binding" shortly before those companies publicly stated that the contracts were not in fact binding. Neil Young, QC, said the change showed that Mr Forrest was conscious that his previous claims "were false and overstated." Page 23.
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Ports and rail operator Asciano Group (AIO.AX), which is currently up for sale, has announced a new contract with Queensland mining company Macarthur Coal (MCC.AX) to haul up to 3.7 million tonnes of coal per annum. Asciano managing director Mark Rowsthorn said yesterday that the nine-year agreement was "another significant step in our strategy of securing market share in Queensland." Asciano shares closed A5 cents higher at A$1.40 in yesterday's trading. Page 23.
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Department store David Jones (DJS.AX) is to release sales figures for the March quarter today, with the company having previously predicted that sales in the second half would be down 10 percent compared to the previous year. However, analysts say many of the high-end retailers' customers come from the finance sector, which has completed its round of job cuts, with those customers who have retained their jobs now expected to resume spending. Page 25.
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The Papua New Guinea liquefied natural gas (LNG) project has recently secured a buyer for its gas, indicating the strength of the project, according to analysts. However, oil and gas company Oil Search (OSH.AX), which has a 34 percent stake in the project, is required to pay around US$1.3 billion towards construction of the LNG plant, and will be US$230 million short unless oil prices improve. Analysts say Oil Search may be forced to sell part of its stake in the project, with a 3 percent share likely to generate US$400 million. Page 25.
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THE AGE (www.theage.com.au)
Queensland-based bank and insurer Suncorp-Metway (SUN.AX) is continuing with moves to split its lending division into a "good bank" and "bad bank." The move is intended to quarantine Suncorp's exposure to around A$14 billion of troubled commercial property and business loans. Suncorp says that although the "non-core" loans will be separated from the other A$43 billion of loans on its books, the bad assets will still be funded by the "good bank." The head of Suncorp's banking division, David Foster, will provide an update on the split tomorrow. Page B1.
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Australia and New Zealand Banking Group (ANZ) (ANZ.AX) has raised A$1 billion in new debt. The raising of the new three-year term debt attracted the backing of Asian investors and was oversubscribed by A$400 million before being scaled back to $1 billion and 57 investors. The issue means ANZ has reached 90 percent of its funding requirements for its financial year ending in September, and is being seen as a further indication of recovery in the credit market. Page B1.
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Retail chain Harvey Norman (HVN.AX) chairman, Gerry Harvey, said that recent sales at his company's Australian franchises have been patchy and subdued. For the third quarter, Harvey Norman booked sales growth of 1.6 percent from its local stores and 3.9 percent from its international stores. Mr Harvey also warned of weakening conditions in New Zealand, while sales in the retailer's Irish stores fell 25 to 40 percent compared with the same period last year. Page B3.
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Biotechnology company Pharmaxis (PXS.AX) says it will be able to bring its cystic fibrosis drug Bronchitol to market without the need to license the drug to a distributor. Chief executive Alan Robertson yesterday said "I think we understand the product, I think we've got a great set of people, I do believe we can do it." Mr Robertson said the five largest markets in Europe, which account for nearly half of the developed world's cystic fibrosis patients, could be serviced by around 25 sales staff. Page B3.
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