PRESS DIGEST-Australian Business News - March 31
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) faces being forced into administration if it is unable to refinance around A$1.3 billion in debt facilities by the end of today. OZ's lenders, mostly overseas banks, extended the debt facility last month until today. China Minmetals A$2.6 billion takeover bid for OZ was rejected by Treasurer Wayne Swan on Friday. However, advisers to both companies have since been working to create a deal which will be acceptable to both the Federal Government and OZ's banks. Page 17.
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Industrial products distributor Alesco (ALS.AX) yesterday announced that it has appointed Caliburn Partnership to examine the possible sale of its scientific and medical division, known as Biolab. The company said 'expressions of interest for the Biolab business have come from a number of parties, including international trade parties.' Analysts say Alesco has been under pressure to strengthen its balance sheet, and the sale of Biolabs could earn up to A$200 million. Page 19.
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Fertiliser manufacturer Incitec Pivot (IPL.AX) yesterday reaffirmed its profit guidance for the full year, with business expected to remain 'robust' according to chief executive Julian Segal. Incitec announced it expects net profit of A$450 million for the year to the end of September and said it has secured loan facilities to cover its working capital expenditure requirements for 2009 and 2010. Mr Segal also announced that Incitec will offer a dividend reinvestment plan for the next three dividends. Page 19.
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Oil and gas explorer Nexus Energy (NXS.AX) is today expected to announce the results of negotiations aimed at securing emergency funding. The company requires the extra funds to pay for this year's large capital development programs, the cost of which could force the company into administration. The funding crisis has arisen following the failure of a plan to sell its 85 percent stake in the A$1 billion Crux liquids project. Nexus has been in a trading halt since March 9, which is due to end today. Page 45.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Zinc mining company Terramin Australia (TZN.AX) yesterday announced two strategic partnerships that will provide the company with A$46 million in funding for the development of its Tala Hamza mine in Algeria. The deals are with China Non-Ferrous Metals Industry, which will gain an 11.2 percent stake in Terramin, and French trading house Transamine, which will emerge with an 8.3 percent stake. The deals still require approval from Australian and Chinese regulators, as well as Terramin shareholders. Page 18.
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Shareholders in stock market operator NSX (NSX.AX), which operates the National Stock Exchange of Australia and the Bendigo Stock Exchange, have called for an extraordinary general meeting to consider the removal of six directors. One of the shareholders who has called for the meeting, Steven Pritchard, said NSX lost A$12.5 million in the first-half of this financial year, while remuneration to executives and directors has continued to rise. Mr Pritchard, who is a nominee for the board, has called for a smaller board and a reduction in corporate overheads. Page 19.
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Wayne Goss, the chairman of Free TV Australia, which represents the free-to-air television industry, has said the sector must 'step up to the plate' and fund the creation of new digital channels if it is to ensure its future. Broadcaster the Ten Network (TEN.AX) launched a new sports digital channel over the weekend, however, rivals Seven Network (SEV.AX) and Nine Network have not committed to new digital channels until later this year. Mr Goss said he believed Seven and Nine are aware they must commit funding, but conceded that, 'new channels are expensive.' Page 19.
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Food manufacturer Goodman Fielder (GFF.AX) is examining the possible sale of its commercial oils unit, according to analysts from the Royal Bank of Scotland Group (RBS). Goodman Fielder, Australia's largest baker, is currently reviewing all of its businesses, and the sale of the cooking oils business could raise between A$150 million and A$250 million. RBS says it believes there is a 75 percent chance the unit will be sold, with the possible buyers including food groups Cargills, Peerless Foods and CTG Wilmar. Page 19.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Engineering and waste management company GRD GRD.AX yesterday released a statement which again denied that there is an impending takeover deal for the company's waste management division. GRD said it receives occasional approaches, but none that have warranted disclosure. The speculation has, however, led to shares in the company rising in value by over 60 percent over the last week, including a 13 percent rise yesterday, to close at 35 cents a share. Page 18.
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Finance company GE Capital Australia, the Australian arm of General Electric (GE.N), yesterday published accounts showing a net loss of A$23.1 million for calendar year 2008. The accounts also indicate GE Capital has suffered major losses through falling asset values. Despite the results, chief executive Steve Sargent told investors that the financing business was a 'going concern'. GE has been pulling out of mortgage and other lending in Australia, and has also been cutting costs through job losses. Page 18.
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Mining company BHP Billiton (BHP.AX)(BLT.L) is expected to release details of a range of new safety measures for its West Australian iron ore operations today. The new measures follow the death of five workers in eight months at the iron operations, leading to calls for the release of information about the miner's safety record, and meetings with the WA Mines Minister Norman Moore. Mr Moore has called BHP's recent safety performance 'alarming and unacceptable'. Page 19.
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With the Federal Government due to announce the winner of the tender to build the national broadband network (NBN) within days, SingTel (STEL.SI)(SGT.AX), the parent company of NBN bidder Optus, has raised over A$1 billion from a syndicate of eight Asian banks. However, analysts say the timing is likely to be coincidental, with SingTel more likely to be accumulating cash at a low interest rate. There are now five parties in the running to win the NBN tender, after telecommunications company Telstra (TLS.AX) was barred late last year. Page 19.
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THE AGE (www.theage.com.au)
The chair of the Federal Government's Future Fund, David Murray, yesterday said that the base pay of executives in Australia's major banks is too high. However, Mr Murray, who is a former chief executive of the Commonwealth Bank of Australia (CBA.AX), argued against having executive pay under the control of regulators, saying that productivity would not be improved, and innovation would be discouraged. Mr Murray also called for credit rating standards to be set by a public agency rather than publicly listed ratings agencies. Page B1.
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Corporate governance advisers RiskMetrics yesterday released a list of the top 10 non-executive directors in Australia, with the list headed by Caltex Australia (CTX.AX) chairwoman and Westpac Banking Corporation (WBC.AX) director Elizabeth Bryan. The research is based on methodology created by RiskMetrics, which said 'we are trying to start a conversation about director performance.' The company said it was not releasing the names of the worst directors on the list, but said it would review its approach in the future. Page B1.
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Western Australia-based BankWest, which was purchased by the Commonwealth Bank of Australia last year, yesterday announced it is to cut 400 jobs. 250 jobs will be lost in Perth, with a further 150 from east-coast offices. Last October, CBA chief executive Ralph Norris said that CBA remained committed to BankWest's network and jobs. BankWest managing director Jon Sutton yesterday said 'the deteriorating national and Western Australia economies and a high cost base mean BankWest has no choice but to cut costs.' Page B3. --
