PRESS DIGEST-Australian Business News - Jan 16
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)
Canadian media conglomerate Canwest CGSa.TO has signalled it may have to sell all or part of its 56.6 percent holding in struggling Australian television company Ten Network (TEN.AX). Canwest made the admission yesterday, following a slump in its share price prompted by revelations the media company may be in danger of breaching some of its banking covenants related to a A$364 million credit facility. Canwest last attempted a sale of its stake in Ten in 2007, asking A$3.10-a-share, compared with yesterday's closing price of A$1.04. Page 45.
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Shareholders in manganese miner OM Holdings (OMH.AX) yesterday approved a move to amend its constitution to adopt takeover protection provisions. The Singapore-based miner is listed on the Australian Securities Exchange but domiciled in Bermuda, making it ineligible for Australian takeover protection laws. The constitutional amendment was proposed following revelations that rival company Consolidated Minerals had purchased an 11 percent stake in the OM Holdings last year. Page 45.
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Full-year dividend forecasts for West Australian conglomerate Wesfarmers (WES.AX) have been slashed, following the company's profit downgrade yesterday. Analysts' predictions for the dividend range from A$1.70-a-share down to A$1-a-share, compared with the previous dividend guidance of A$2-a-share. Wesfarmers has warned that its interim profit could be 10 percent below expectations. 'It makes sense to cut the dividend and repay debt,' said Deutsche Bank analyst Kristan Walker. Page 45.
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The decision by British gas company BG Group (BG.L) to scrap a proposed A$750 million power plant in the Hunter Valley region has hampered the New South Wales Government's plans to reduce the state's dependence on coal-fired power generation. BG inherited the planned 400 megawatt to 600 megawatt gas-fired power station, which was expected to supply electricity for up to 500,000 homes, from its recent A$5 billion takeover of Queensland Gas Co. Page 48.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
BHP Billiton (BHP.AX) (BLT.L) and Japanese group Pan Pacific Copper made an agreement on Wednesday under which BHP agreed to pay higher Japanese smelter charges to process copper from its Escondida project in Chile.
The higher fee means that the BHP's copper prices have been effectively lowered. Pan Pacific, which is the biggest Japanese copper refinery, said yesterday that it had won increases in annual treatment and refining charges of 'about 70 percent' for copper from Escondida, the world's largest copper project. Page 16.
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Shopping centre owner Westfield Group (WDC.AX) was issued with a query from the Australian Securities Exchange yesterday following a 12 percent plunge in its share price. The group's response to the query was that it was not aware of any reason behind the share price's sharp fall since Tuesday. Westfield, which has 119 shopping centres worth A$60 billion across the United States, Britain and Australasia, will release its full-year results next month. Page 17.
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Collapsed electronic payment company On Q Group is to be wound up after its administrators found a number of questionable transactions, including a A$3.7 million loan to its former director, Peter McDougall. Creditors of the failed group, which include Vodafone and Australian and New Zealand Banking Group, have been warned they stand to receive just A$2.7 million of the A$69 million owed. On Q was placed into administration last year following the collapse of technology company Bill Express, in which it had a 33 percent stake. Page 17.
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West Australian-based Co-operative Bulk Handling's unit GrainPool has emerged as Australia's largest wheat exporter, following the shipping of the first wheat crop under newly deregulated export conditions. Around 13 million tonnes of wheat crop, worth over A$4 billion, is available for export, with around 9 million tonnes of exportable wheat expected to come from Western Australia. 'Growers have backed GrainPool in a big way,' GrainPool senior trading manager Josh Roberts said yesterday. Page 22.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Oz Minerals (OZL.AX) said last night that lenders on one of its projects had granted an extension to the date by which the troubled zinc miner must grant security over some assets.
The company said it remained in talks with lenders over a key bridging loan. Oz also said its cash balance had improved to A$139.4 million on January 14 from A$132 million a week earlier. Page 21.
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The administrators of Storm Financial have said the collapsed investment company would no longer 'transact further business for clients.' The move by administrators Raj Khatri and Ivor Worrell from Worrells Solvency & Forensic Accountants, who have also sacked 115 Storm Financial staff, has thrown into doubt investments made by thousands of the company's clients.
Storm Financial is being investigated by the corporate regulator over allegations that it failed to inform clients about its precarious financial situation. Page 21.
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Growing concerns over the world economy and rising unemployment in Australia triggered a sharp fall in the Australian sharemarket yesterday. Resources companies BHP Billiton and Rio Tinto (RIO.AX) saw significant share price declines, as did diversified conglomerate Wesfarmers. Major banks National Australia Bank, ANZ Bank, Commonwealth Bank and Westpac Banking Corp also lost ground.
The ASX200 index dropped 4.27 percent, or 157.5 points, to 3529.5, and the broader All Ordinaries index fell 4.07 percent, or 147.5 points, to 3476.8. Page 21.
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Distressed shopping centre owner Centro Properties (CNP.AX) has announced a trading halt until Monday as it talks with bankers and noteholders to finalise a restructure plan. The announcement came as a A$5.05 billion debt facility agreed by Centro's Australian and United States lenders a month ago expired yesterday. According to sources linked to the talks, the new deal, which includes a A$4 billion debt deadline extension, was taking time to finalise because of the complexity of getting 23 lenders to sign off on the agreement. Page 22.
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THE AGE (www.theage.com.au)
Coal mining company Coal & Allied Industries said production for the three months to December 31 was similar to the same period last year at 4.75 million tonnes, about 8 percent higher than the previous quarter.
Full-year production for 2008 was 4.8 percent higher than the previous year at 18.61 million tonnes. Better mining conditions helped improve output, said the company, which is majority owned by diversified miner Rio Tinto. Page 20.
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Australia has ranked 21 out of 28 countries in a survey comparing the severance pay received by workers when they are made redundant. The survey by employment research firm Right Management found Australian workers received on average 2.79 weeks' pay per year of service when they were laid off, 22 percent less than workers from other similar economies. However, Australian workers received better assistance packages. Page 20.
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The Australian economy is among the freest in the world, according to a United States-based conservative think-tank. The 2009 Index of Economic Freedom published by the Heritage Foundation has given Australia a high score of 82.6, making the country's economy the third freest in the world. Page 22.
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Rio Tinto managing director Tom Albanese has predicted that the global economic downturn could persist for at least two years. 'While we see some very small signs of economic activity in response to stimulus packages, it would not be sufficiently clear to say that we're through this downturn,' Mr Albanese said yesterday. Rio, which saw iron ore sales from its operations in Western Australia's Pilbara region slump 24 percent in the December quarter, plans to lay off at least 14,000 workers this year. Page 22.
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