PRESS DIGEST-Australian Business News - Nov 13

THE SYDNEY MORNING HERALD (www.smh.com.au)

Speculation is mounting that Qantas Airways (QAN.AX) may be forced to downgrade its profit guidance for fiscal 2009 in its upcoming annual meeting, following a decline in domestic and international passengers in September. Qantas, which had previously flagged a pre-tax profit of between A$428 million and A$1 billion, may also have to reduce the value of its aging fleet of 747s and 767s, according to Macquarie Equities. Qantas maintained that "it continued to monitor capacity and demand in line with market conditions." Page 27.

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Australia and New Zealand Banking Group (ANZ) chairman Charles Goode yesterday announced his resignation from the board. Mr Goode, who had been under increasing pressure to step down following 13 years in the role, is to be replaced by Sir Rod Eddington within the next 12 months. The appointment of Sir Rod and former Singapore Telecommunications chief executive Lee Hsein Yang to the ANZ board is part of a push into Asia being engineered by ANZ chief executive Mike Smith, according to analysts. Page 27.

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St George Bank is expected to approve the proposed A$16 billion merger with Westpac Banking Corporation following strong institutional voting support in pre-poll proxies. Today's special shareholder meeting requires a 75 percent shareholder majority to pass the merger, which will see the joint entity become the largest Australian bank. Retail investors are expected to vote in favour of the merger following an agreement by Westpac to allow St George to declare a one-off special dividend of A31 cents a share. Page 28.

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Singapore Telecom-owned Optus has frozen hiring across all of its businesses despite a 2 percent rise in net profits to A$125 million for the second-quarter. The telecommunications company attributed an increase in costs to the subsidisation of the lucrative iPhone market following the smartphone's launch in July. Chief executive Paul O'Sullivan said yesterday that Optus was being "very prudent in cost management" and that at present it still remained "fairly resilient' to the economic downturn. Page 28.

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THE AGE (www.theage.com.au)

Investment bank Babcock & Brown (BNB.AX) (B&B) yesterday said it could not rule out the possibility that it may be forced to perform more asset write-downs, which would put the bank in breach of covenants with its lenders. B&B said it would not know the full extent of asset impairment charges until next year, but has already started a "consultative process with our banking syndicate." Standard & Poor's has downgraded B&B's rating from BB to BB-minus this week following slower than expected asset sales. Page B2.

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The Australian Securities and Investments Commission has had civil cases it is pursuing against five former executives of the Australian Wheat Board (AWB) placed on hold by the Victorian Supreme Court. Justice Ross Robson made the decision based on the fact that the five may still face criminal charges. The judge said the cases would be stayed until the court was formally advised that no criminal charges would be laid. The executives are accused of breaching their fiduciary duties and bringing AWB into disrepute. Page B3.

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Global miner Xstrata (XTA.L) has been rebuffed by small shareholders in Melbourne's Indophil Resources (IRN.AX), who have approved a proposal giving Indophil's board an authority to sell the company's stake in a Philippines copper/gold project. Xstrata, which owns 19.9 percent of Indophil, had campaigned against the decision, which was passed by 65.25 percent to 34.75 percent. Indophil chairman Brian Phillips said the vote showed the "overwhelming support of shareholders' for the company's board. Page B3.

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Helen Lynch, chairwoman of the Westpac Foundation and former director of companies such as Coles Myer, has called for business to commit to the promotion of women to senior ranks by linking the issue to chief executives' remuneration. Speaking to an Australian Institute of Company Directors function yesterday, Ms Lynch said companies should set targets for the number of women in senior roles as they do for any other strategic measure, arguing that the under-utilisation of 50 percent of the population was against the country's interests. Page B3. --