PRESS DIGEST-Australian Business News - March 24
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) will have to wait another 90 days before finding out if the proposed A$2.6 billion takeover by China Minmetals has been approved. OZ was last night told by the Foreign Investment Review Board that the extra time is required to examine the proposal. OZ is now in talks with its lenders over the refinancing of A$1.1 billion of debt which is due by March 31, with the miner seeking an extension until September to avoid having receivers called in before the takeover can be completed. Page 16.
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Lawyers for the Queensland Government yesterday asked the Victorian Supreme Court to disallow a shareholder meeting which has been called to wind up the funding vehicle for toll road company BrisConnections BCSCA.AX. The meeting has been called by BrisConnections' largest shareholder, Nick Bolton. Counsel for the Government said the company's project was 'of vital importance for the state of Queensland,' but admitted that it does not 'have authority for a case of this kind'. Page 16.
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Perth-based mining company Straits Resources (SRL.AX) has agreed to a proposed deal with Thailand's PTT Group (PTT.BK) which would provide the company with $335 million. The deal would see PTT, a diversified energy group which is 51.7 percent owned by the Thai Government, purchase 60 percent of Straits' coal assets along with its Yannarie salt project. The deal requires approval from the Foreign Investment Review Board. Straits said it would use the funds to make acquisitions in the mining sector. Page 16.
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Carrier Qantas Airways (QAN.AX) is expected to soon announce the results of a review of its management structure, which is expected to call for 100 senior executive jobs to be slashed. The job cuts are believed to be restricted to the senior management level, although further job losses have not been ruled out if the downturn in the airline industry worsens. The airline has seen a changing of the guard in its senior ranks since the appointment of Alan Joyce as chief executive last year, and Leigh Clifford as chairman a year earlier. Page 17.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
The Australian Securities and Investments Commission has banned a Sydney broker for 18 months after finding that he spread false and misleading information about investment bank Macquarie Group (MQG.AX) and the Macquarie Cash Management Trust. The broker, John Macphillamy, sent emails to 32 traders in Australia and overseas on September 17, claiming there was a run on the cash management trust which would lead to Macquarie's share price falling dramatically. Page 17.
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Regional television broadcaster Prime Media Group (PRT.AX) is expected to announce details of a capital raising today, after entering a trading halt yesterday. It is thought the raising will be in two parts, a A$70 million entitlement issue and the issuing of new shares to media group the Seven Network (SEV.AX). Seven, which is owned by Kerry Stokes, is restricted from taking more than a 15 percent stake in Prime, which is expected to cost less than A$25 million. The funds are to be used to reduce Prime's A$270 million of debt. Page 17.
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Airline Virgin Blue (VBA.AX) yesterday announced that it has signed an agreement with United States carrier Delta Air Lines to allow each airline to carry passengers from each other's networks. The agreement will allow passengers to buy a ticket on Virgin's international airline, V Australia, to Los Angeles and then continue on to another destination within the US via Delta. News of the agreement saw Virgin's share price rise more than 13 percent yesterday. Page 19.
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Generic drugs manufacturer Sigma Pharmaceuticals (SIP.AX) yesterday revealed full-year results, with net profit increasing by 3.9 percent to A$80.1 million. Managing director Elmo de Alwis said that the company would not provide specific guidance due to the uncertainty surrounding economic conditions, but said that 'we expect to deliver modest growth in the 2009-10 fiscal year.' The company also said it hopes to reduce its debt level from A$900 million to A$825 million this year. Page 19.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Troubled Gold Coast property financing company City Pacific (CIY.AX) yesterday released a statement to the Australian Securities Exchange to say that its overdue results for the December half-year will be released by the end of this month. The company stated that it had been assessing the advice it has received 'in relation to certain assets,' raising speculation that significant asset write-downs will be contained in the results. City Pacific last month was given an extension on debts of A$203.5 million. Page 20.
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Real estate investment trust FKP Property (FKP.AX) yesterday confirmed that it has sold its TAC House site in Geelong Victoria, with one analyst from Goldman Sachs JBWere estimating that the property sold for A$75 million, A$10 million less than its valuation when first built. FKP shares rose 8.5 cents to close at 91.5 cents a share before the announcement, after the stock surged 23.4 cents late on Friday. The recent share price increases have raised speculation that developers Mulpha and Stockland (SGP.AX) are preparing a takeover for FKP. Page 20.
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Mining company BHP Billiton (BHP.AX)(BLT.L) will discuss safety issues with its West Australian iron ore contractors this week following the fifth death in eight months at its Pilbara iron ore operations last week. BHP's recent safety record is significantly worse than that of rival miner Rio Tinto. On Friday, WA Mines Minister Norman Moore spoke to the head of BHP's iron ore operations, Ian Ashby, about the issue. A spokesman for BHP said the company recognised that the recent safety record 'is unacceptable'. Page 21.
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Telecommunications investment fund Babcock & Brown Capital BCM.AX is to pay its former parent company, collapsed investment bank Babcock & Brown BNB.AX, a A$5 million fee to buy itself out of the management arrangements currently in place. The fee is a 90 percent reduction on the $50 million previously agreed, and is a reflection of the A$1.4 billion loss B&B Capital reported last month in its half-yearly report. Investors in B&B Capital will vote on the deal next month. Page 21.
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THE AGE (www.theage.com.au)
Bendigo and Adelaide Bank (BEN.AX) yesterday announced that Mike Hirst will become the regional bank's chief executive from July, replacing Rob Hunt. The appointment of Mr Hirst is the first change of chief executive at Bendigo in many years, with Mr Hunt appointed chief executive in 1988. Mr Hirst, who joined the bank in 2001, is currently the head of the bank's retail division, with responsibility for the bank's network of over 400 branches, group solutions and treasury. Page B3.
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The Australian Shareholders Association yesterday released its new policy on executive remuneration, saying the tougher approach was in response to a widening gap between executive pay and company performance. The policy calls for executives to be sacked if they ignore shareholder recommendations on remuneration, and for an end to 'golden parachutes'. The ASA also called for long-term incentives to apply only to performance targets achieved over periods of four or more years. Page B3.
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British natural gas company BG Group (BG.L) has extended its takeover offer for Brisbane-based coal-seam gas company Pure Energy PES.AX until April 6. Analysts say BG hopes to gain 100 percent control of the company after yesterday securing a 70 percent holding. Extending the A$995 million cash offer gives rival Arrow Energy, which has a 20.3 percent stake in the company, further time to decide whether it will sell to BG. Arrow's rival bid expired on March 13 after failing to gain control of Pure. Page B4.
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