PRESS DIGEST-Australian Business News - Jan 28
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)
Australian miner Macarthur Coal (MCC.AX) says it is standing by the revised coal sale figures announced last month, when the company said it would sell 3.9 million tonnes of coal for the 12 months to the end of June this year. The miner yesterday said it had sold 2.3 million tonnes in the six months to the end of December. Macarthur Coal says that despite falling demand for its pulverised coal injection product, it will be able to increase the amount of thermal coal it sells. Page 14.
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A survey by the Australian National Retailers Association (ANRA) has found that Australian consumers are planning to cut discretionary spending by an average 21 percent in the first six months of this year. The ANRA says the results show the impact of falls in superannuation and share portfolios, as well as increasing concern about job losses. Analysts say that the Federal Government's recent A$10 billion stimulus package helped Christmas holiday sales, but this is unlikely to be sustained. Page 43.
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Receivers for child-care group ABC Learning Centres ABS.AX are to sell the collapsed company's 720 profitable centres by the end of 2009, with the sales process to start in the next two to three months. Receiver Chris Honey, of McGrathNicol, said the 55 centres which have already been closed were not profitable, and the 241 centres which are currently being sold by court-appointed receivers PPB are also loss-making. The remaining profitable centres have been supported by an additional A$35 million in funds from ABC's lenders. Page 43.
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Retail shareholders are expected to be wary of the rights issue from diversified company Wesfarmers (WES.AX) which opens tomorrow, after many were hurt by the company's previous issue in April 2008. The previous rights issue was priced at A$29 a share, since when the company's shareprice has slumped, closing at A$16.40 yesterday. Tomorrow's rights issue, priced at A$13.50 a share, closes on February 23, and the company expects the take-up rate may be as low as 20 percent. Last week's institutional raising provided the company with A$2.9 billion. Page 43.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Former Babcock & Brown BNB.AX (B&B) executives Phil Green and Rob Topfer may together receive over A$3 million after B&B's private equity offshoot B&B Capital said it would return A$100.7 million to shareholders. B&B Capital yesterday said it has A$325 million in cash reserves, and will keep A$200 million of that to support the business, although it has no plans to make further investments. A spokeswoman for B&B said the planned capital return was in response to requests from institutional shareholders. Page 19.
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Speculation is growing that miner Rio Tinto (RIO.AX) planning a rights issue to raise between A$4 billion and A$6 billion. Talk of the possible raising has continued despite comments from Rio chief executive Tom Albanese earlier this month that a raising would not be required unless conditions deteriorated. The mining company has US$38.9 billion of debt remaining from its acquisition of aluminium manufacturer Alcan in 2007, and must repay US$8.9 billion of debt by October 22 this year. Page 19.
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A report from marketing company Aegis Media has predicted that the Australian advertising industry will see growth of only zero to 2 percent this year, although real spending will fall by between 3 percent and 5 percent once inflation is taken into account. There is speculation that some areas of the market are experiencing greater falls, with industry insiders tipping spending on television to fall by as much as 10 percent in the current quarter compared to last year. Official television revenue share figures for the past six months will be released this week. Page 21.
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The Australian Competition and Consumer Commission (ACCC) yesterday rejected a proposal from Air Canada and Air New Zealand (Air NZ) (AIR.NZ) which would have seen the two airlines co-operate on trans-Pacific flights. The ACCC said it was concerned the deal would have reduced competition on the route. However, the airlines are considering an appeal, with Air NZ criticising the decision, saying the regulator had approved similar proposals involving Qantas Airways (QAN.AX), South African Airways and Japan Airlines. Page 21.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
Tolhurst Group TNL.AX, Melbourne's oldest stockbroking firm, yesterday agreed to sell its broking operations and brand name for A$7 million to Perth-based rival Patersons Securities. Tolhurst will have the opportunity to purchase shares in Patersons, to give it a 31 percent stake in the merged stockbroking business. Tolhurst also announced it intends to sell its financial services arm, ComCorp, warning of a A$23 million write-down against the business, which it purchased in 2007 for A$30 million. Page 19.
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Earnings at earth-moving machinery retailer WesTrac, owned by West Australian businessman Kerry Stokes, are likely to be hit by falling orders. Westrac holds the franchise to sell Caterpillar machinery in Western Australia, New South Wales and the north of China. However, Caterpillar yesterday announced it is cutting 20,000 jobs globally and expects zero growth this year. WesTrac will face further difficulties as falls in the Australian dollar make overseas-sourced equipment more expensive. Page 19.
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Troubled Australian miner Compass Resources (CMR.AX) will tomorrow hold a meeting to ask shareholders to approve the issue of a US$10 million note to the company's joint venture partner, China's Hunan Nonferrous. Hunan provided Compass with the funds in advance in November. Compass yesterday said it had only A$9 million in cash, indicating the company's cash position has worsened since it received the funds from Hunan. The company said it would attempt to raise further funds and reduce expenses. Page 20.
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Australian shopping centre owner Macquarie CountryWide Trust (MCW.AX) has sold a portfolio of 30 United States shopping centres for US$427 million. The sale price is 12 percent less than the portfolio originally cost, but analysts say the sale was a good result in the current economic climate. The group has also indicated it may sell a number of Australian assets, valued at A$100 million. Macquarie CountryWide is believed to have A$958 million of debt due to expire in 2009-10, as well as A$1.37 billion which will expire in 2010-11. Page 21.
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THE AGE (www.theage.com.au)
The receiver of Australian Discount Retail (ADR), James Stewart of Ferrier Hodgson, yesterday said he was optimistic the collapsed company's 374 stores will be sold. Mr Stewart did not say how many approaches he has received so far, but said "we have had good interest in the business." ADR owns bargain retailers including Go-Lo, Crazy Clark's and Sam's Warehouse. The company owes a syndicate of banks A$96 million, and in 2007-08 had a turnover of A$811 million. Page B3.
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Credit agency Standard & Poor's (S&P) has issued a report on the effect that the Federal Government's Carbon Pollution Reduction Scheme will have on Australian companies, suggesting coal-fired power generators and energy retailers will be the most affected. S&P says generators will face greater difficulties refinancing debt as lenders impose more stringent conditions and covenants. The report also says the impact on energy retailers will depend on their ability to pass on higher costs to users. Page B3.
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Australian wine and beer company Foster's Group Ltd (FGL.AX) has not commented on a report from analysts at Goldman Sachs JBWere which claims the group may be forced to make further write-downs of up to A$700 million against the value of its wine business. In August last year, Foster's reduced the value of its intangible wine assets by A$470.8 million. The company is due to report first-half results on February 17, and is also expected to release the results of a strategic review of its wine assets. Page B4.
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Australia's second-largest steel producer, OneSteel (OST.AX), has cut production at all of the company's major manufacturing plants following a decline in first-half sales. The company yesterday issued a statement to the Australian Securities Exchange which said the global economic crisis had led to "lower sales levels than expected, resulting in higher inventories." OneSteel also said it has refinanced A$458 million of the A$500 million of debt that is due to mature this year. Page B4. --
