PRESS DIGEST-Australian Business News - April 22
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)
-- BrisConnections investors with less than 50,000 units in the toll-road operator will be able to offload their holdings, and the liabilities associated with them, after investment bank Macquarie Group (MQG.AX) yesterday offered to buy them. News of the offer came as major shareholder Nicholas Bolton exercised a put option on his 77.4 million units which Mr Bolton hopes will relieve him of the A$155 million owed on the units. The Victorian Supreme Court has previously described the put option as a "sham". Page 47.
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Poker machine manufacturer Aristocrat Leisure (ALL.AX) yesterday announced plans to raise up to A$275 million. The company said it would raise A$200 million through an institutional placement of shares at A$3.25 each, a discount to the company's last trading price of A$3.98, with the remaining A$75 million to be raised through a share purchase plan. Executive chairman David Simpson said the sector was undergoing a general recapitalisation "and we are part of that." Page 47.
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Recruitment company Talent2 International yesterday said the weak employment outlook was continuing to put pressure on the recruiter, with the company recording a loss for the three months to the end of March. Managing director Andrew Banks also warned that "further deterioration in operating conditions and performance" in Hong Kong and Britain are likely to lead to further write-downs. Analysts say the entire recruitment sector has been affected by dramatic falls in permanent placement activity. Page 47.
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Ian McLeod, the managing director of grocery chain Coles Group (WES.AX), says the retailer has been examining instances where multinational suppliers are making higher profit margins in Australia than in other countries. Mr McLeod said that although Coles was speaking to suppliers about pricing in these cases, "I disagree with the point we're taking a combative approach to suppliers." Coles yesterday announced sales figures for the March quarter, which were up 6 percent on a comparable-store basis. Page 48.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
-- Mining company Ivanhoe Australia (IVA.AX) yesterday announced that its Merlin Project in Queensland contains around A$6.4 billion of molybdenum and rhenium at current spot metal prices. Chief executive Peter Reeve said the project could make Ivanhoe "the world's dominant and most reliable supplier of rhenium and position the company as a major molybdenum producer." Shares in the company soared following the announcement, closing 29.66 percent higher at A$1.88 a share. Page 21.
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Troubled clothing and footwear manufacturer Pacific Brands (PBG.AX) yesterday announced that it has received an extension from lenders on required debt payments. Repayment of the first of three tranches of debt has been extended from August 2010 to January 2011, with the second tranche repayment date also extended. Chief executive Sue Morphett said "the revised deal has been fully supported by our existing banking group." The company currently has debt facilities of A$1.05 billion. Page 23.
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Investment company Babcock & Brown Capital (BCM) BCM.AX yesterday announced that it will pay out A$135 million of the firm's A$175 million of cash to investors if it does not receive a firm bid by the end of June. The company's board said any bid would need to include a premium for its ownership of Irish telecommunications company Eircom. The move by BCM partly blocks a proposal from the Taemas Bridge fund which would see all of BCM's A$175 million in capital returned to shareholders and the company delisted. Page 23.
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The world's largest drilling company, Boart Longyear (BLY.AX), yesterday said revenue for calendar 2009 is expected to be 35 percent to 45 percent below 2008's A$2.6 billion. Boart makes drilling products as well as operating about 1200 drilling rigs around the world. Chief executive Craig Kipp said that although sales of drill products are yet to recover, tendering activity is increasing, and "certain customers are gradually putting rigs back to work at sites around the world." Page 23.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
-- The head of a Federal parliamentary committee investigating recent financial collapses yesterday said that collapsed financial advice company Storm Financial had passed audits and compliance checks before its collapse. Federal Labor parliamentarian Bernie Ripoll said the example of Storm showed that the Australian Securities and Investments Commission is not equipped to play a prudential regulatory role. Mr Ripoll said the regulator's powers are being reviewed by the committee. Page 17.
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Research agency Chant West said superannuation funds with the majority of their allocations in growth assets saw their value increase by 2.7 percent in March, the first increase by superannuation funds in eight months. The agency's founder, Warren Chant, warned that the increase was based on what many traders saw as a "bear market rally." Mr Chant said people should "treat the good news with a lot of caution." Chant West say the better performing Australian superannuation funds are likely to have lost 12 percent for the year. Page 18.
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Real estate investment company Dexus Property (DXS.AX) went into a trading halt yesterday in preparation for a A$650 million capital raising. Analysts expect the company will offer securities at between A65 cents and A70 cents, a discount to the last trading price of A82 cents. The company is expected to use the funds to buy out rival GPT Group's (GPT.AX) 25 percent stake in Sydney's Governor Phillip Tower. Dexus is also thought to be interested in buying GPT's 50 percent share in Sydney's Australia Square. Page 19.
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THE AGE (www.theage.com.au)
Australia's largest mining companies are seeking to have 11 industry bodies merged into the Minerals Council of Australia. The move is an attempt to cut costs and increase the lobbying power of the Minerals Council. A letter sent before Easter and signed by the chief executives of mining companies such as BHP Billiton (BHP.AX), Rio Tinto (RIO.AX) and Xstrata (XTA.L), says the group will discontinue funding to the other industry bodies. The combined cost of the industry bodies is believed to be above A$45 million each year. Page B1.
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A survey of Australia's largest companies has found that many of them are unsure of how much they pay in tax. The survey's director, PricewaterhouseCoopers tax partner Tim Cox, says many companies found it difficult to identify many of the taxes embedded within products and services. Mr Cox said five taxes accounted for 87 percent of the tax paid by the surveyed businesses, and called for the Federal Government's tax review to recommend the removal of many of the smaller, nuisance taxes. Page B2.
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Construction lobby group the Housing Industry Association (HIA) has recorded a 19.6 percent fall in profit during calendar year 2008, the second year in a row that profits have fallen. The falls are a reflection of the difficult trading conditions for home builders, according to analysts, with membership recruitment for the association also suffering. HIA chief executive for policy, Chris Lamont, said the sector is experiencing its worst year in a decade. Page B3. --
