PRESS DIGEST-Australian Business News - April 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)
-- Mining company OZ Minerals (OZL.AX) is believed to have reached agreement on a new deal with China Minmetals which will provide OZ with between A$1.6 billion and A$2 billion. The original deal, worth a total of A$3.7 billion, was rejected by Federal Treasurer Wayne Swan last Friday on national security grounds. The new deal will see OZ retain its Prominent Hill mine and the Martabe mine in Indonesia, as well as its listed investments. The new deal is expected to help OZ secure an extension on A$1.1 billion of debt which fell due yesterday. Page 49.
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Telecommunications company Telstra (TLS.AX) yesterday continued its criticism of the Federal Government's national broadband network (NBN). Telstra's Kate McKenzie said taxpayers' money would be better spent on providing improved telecommunication services to rural and regional areas, as there is abundant competition in the cities. However, rival group Optus said the lack of competition in rural areas was due to Telstra's 'anti-competitive behaviour.' The Government is expected to announce a winner of the NBN tender next week. Page 50.
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Oil and gas company Nexus Energy (NXS.AX) yesterday announced that it had sold its remaining 15 percent share in an exploration permit in the Browse Basin off Western Australia to Royal Dutch Shell for US$19 million. The sale provides some relief from pressures to fund an extensive program of exploration and development commitments. However, the company yesterday requested a further two-week extension to its trading halt as it continues negotiations to sell all or part of its 85 percent stake in the Crux liquids project. Page 50.
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Stephen Gerlach, chairman of oil and gas company Santos (STO.AX), yesterday announced he will retire at the end of this year, after eight years in the role of chairman, and 20 years as a board member. Following a change of chief executive last year, Mr Gerlach said his departure would complete a renewal process in the company. Mr Gerlach will be replaced by Peter Coates, who joined the board of Santos last year, and is also chairman of mining companies Xstrata Australia (XTA.L) and Minara Resources (MRE.AX). Page 51.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
-- Electricity and gas retailer AGL Energy (AGK.AX) is to purchase 63 power-generating wind turbines under an agreement with India's Suzlon Energy (SUZL.BO). The turbines are to be part of a A$341 million wind-power project in South Australia. Last month AGL said it expects to approve around A$1.1 billion of energy projects driven by wind and gas-fired generation this year. The Federal Government is aiming to increase power generation from renewable energy from its current level of 9,500 GWh to 45,000 GWh by 2020. Page 20.
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Energy utility asset fund DUET Group (DUE.AX) yesterday launched an institutional placement and entitlement offer to raise A$264 million in capital. The company also said it would cut its second-half distribution from A14.125 cents to A10 cents a unit. The group is offering stapled securities at A$1.30 each, a 24 percent discount on DUET's last traded price of A$1.72. The company said it is undertaking the capital raising in order to strengthen its balance sheet, reduce leverage and provide funding for possible growth opportunities. Page 20.
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Creditors to Gold Coast-based property company Raptis Group yesterday approved a deed of company arrangement (DOCA). Raptis founder Jim Raptis hopes the move will be the first step in a restructure of the company that could lead to its relisting on the Australian Securities Exchange. Raptis went into administration at the start of this year, with A$940 million owed to a consortium of lenders, and over A$1 billion in total liabilities. The DOCA will see creditors take 40 million shares in the company in place of debt. Page 21.
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The Australian Prudential Regulation Authority (APRA) has rejected a plan by Bendigo and Adelaide Bank (BEN.AX) which the regulator said breached prudential standards. The deal would have seen the bank buy one of its own trusts, the Adelaide Managed Funds Asset Backed Unit Trust, at A$1.85 a unit, well above the A$1.18 trading price the units were trading at. APRA said the large premium offered on the units amounted to providing credit support to the trust, and was not according to market terms. Page 21.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Macquarie Communications Infrastructure Group (MCG)MCG.AX is the subject of a A$1.37 billion friendly takeover bid announced yesterday by Canadian superannuation fund the Canadian Pension Plan. The chairman of MCG's independent board committee, Malcolm Long, has recommended the deal to investors, saying "we're mindful of some the challenges facing MCG into the future…in terms of the availability of capital and the refinancing of assets." Page 21.
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Financial services group Merrill Lynch has warned that Australian grocery retailers are unlikely to meet market growth expectations over the coming five years. Merrill Lynch analyst David Errington says the market is expecting the sector, including companies such as Woolworths (WOW.AX), Coles (WES.AX), Metcash (MTS.AX) and Aldi, to increase profit by A$2 billion over the next five years. However, Mr Errington says profit only grew by A$1.36 billion over the past five years, and is now slowing. Page 22.
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Agriculture chemicals group Nufarm (NUF.AX) yesterday released results for the six months to the end of January, with first-half net profit of A$65.7 million, compared to A$4.6 million the previous year. Nufarm chief executive Doug Rathbone called the result "pleasing in the current economic environment." Mr Rathbone also said the company expected to post a net profit of A$220 million for the full year. Following the results, shares in Nufarm rose 9.71 percent to close at A$11.30. Page 23.
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Fred Bart, whose company Carodaba owns the 16-store Australian bedding chain, The Sleeping Giant, has rejected claims from the company's administrator that the company had traded while insolvent, and that accounts had been changed to turn A$1.6 million in loans into management fees. However, the stores are to continue trading after creditors accepted a deed of company arrangement, which will see creditors receive A$360,000 of the A$2.9 million they are owed. Page 23.
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THE AGE (www.theage.com.au)
Toll road builder BrisConnections BCSCA.AX may be forced to show evidence that it is solvent, and provide an independent report on the state of its accounts to unit holders. BrisConnections is currently in court, seeking to have its largest investor, Australian Style Investments, wound up. However, a Brisbane company, Wonate One, was yesterday allowed to join proceedings as a co-defendant, saying it would represent "mum and dad shareholders" of BrisConnections, who just want to know "what is my unit worth." Page B1.
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Property company GPT Group (GPT.AX) has been told that a put option, which would force GPT to buy a 16.67 percent stake in a shopping centre in Victoria's Maribyrnong, may be exercised by two members of the Besen family. If exercised, the put option would cost GPT around A$200 million. GPT currently has around A$1.9 billion of non-core assets up for sale as it seeks funds to meet current refinancing commitments. A spokesperson for GPT said the shopping centre "is actually a high quality asset." Page B3.
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The industry body representing Australia's four largest newspaper publishers - Fairfax Media (FXJ.AX), News Ltd (NWS.AX), APN News & Media (APN.AX) and West Australian Newspapers (WAN.AX) - has rejected speculation that the sector is in permanent decline. Brendan Hopkins, chairman of The Newspaper Works, which represents publishers, said that advertising revenue for newspapers fell by less than 1 percent last year to around A$4 billion. Mr Hopkins also denied that the decline was due to advertising moving to the internet. Page B3.
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The Australian Transaction Reports and Analysis Centre, which regulates the Federal Government's new anti-money laundering regime, yesterday said it had received around 7,000 compliance reports for the new laws. However, around 13,500 entities are required to lodge such reports, which were due by midnight last night. The reports must be lodged by organisations such as banks, financial services companies, money transfer services, bullion dealers and gaming businesses. Page B4. - -
