PRESS DIGEST-Australian Business News - July 7
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 Rio Tinto (RIO.AX) is selling off its Alcan Packaging unit and says it will push ahead with further asset sales. Rio announced yesterday that Bemis Company Incorporated would pay US$1.2 billion (A$1.5 billion) in cash and stock for the Alcan Packaging Food America's unit, which Rio acquired two years ago as part of its ill-fated acquisition of aluminium producer Alcan. Rio said "the divestment program continues for other assets identified for sale, including the remainder of Alcan Packaging and Alcan Engineered Products.' Page 20.
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Australian packaging group Amcor (AMC.AX) is to undertake a A$1.2 billion capital raising to help fund its planned acquisition of Alcan packaging assets in Europe. Amcor and mining company Rio Tinto are said to be close to a settlement after months of negotiations on a A$2.8 billion deal for Alcan's flexible food packaging operations in Europe and its tobacco packaging unit. Analysts say the deal looks closer to being announced following yesterday's agreement by Rio to sell its Alcan Packaging Food America's unit to Bemis Company Incorporated. Page 20.
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Banking sources have denied a report that Seven Media Group may be in danger of breaching its banking convenants following the media advertising downturn. Debtwire, which reports on debt markets, says an April statement to bankers by Seven Media, a joint venture between Kerry Stokes's Seven Network and United States equity firm Kohlberg Kravis Roberts, suggests that its year-to-date earnings are just below an interest cover ratio requirement. A source close to the syndicate of more than 30 banks has dismissed the report as ill-informed. Page 45.
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Australian airports have rejected calls from airlines to lower their aeronautical charges in the current struggling air travel market. The appeal followed a decision yesterday by Auckland Airport, New Zealand's busiest airport, to cut its fees for international flights because of a severe slump in passenger traffic. Qantas Airways has asked airports around Australia to lower a range of fees by about A$700 million. A spokesman for Brisbane Airport, Jim Carden, rejected the idea, saying "we've got a business to run.' Page 47.
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THE AUSTRALIAN (www.theaustralian.news.com.au)
Shareholders are demanding an explanation for the surprise departure of chief executive Dick Morris from Westpac Banking Corporation-backed fund manager BT Investment Management. Mr Morris announced last week, shortly after delivering a three to five-year strategic plan, that he would quit the firm in October. However, BT said yesterday that Mr Morris "had agreed' to leave next Monday. Wilson Asset Management, BT's second-largest independent shareholder, said "BT has to explain to the market what is going on.' Page 17
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Almost a third of Australian firms expect to lay off staff this quarter, according to a new survey. Dun & Bradstreet (D&B) says a nationwide survey over the past three months of 1200 firms in all industries has found that 31 percent expect to cut staff in the September quarter because of tough trading conditions. D&B chief executive Christine Christian says business executives remain concerned about the outlook. "This is a clear indication that we may not experience the V-shaped recovery that some have anticipated,' said Ms Christian. Page 17.
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The Muslim Community Co-operative (Australia) (MCCA) is hoping to become Australia's first Islamic bank in three years. MCCA managing director Chaaban Omran has told an Islamic banking conference that the co-operative will ask the Australian Prudential Regulation Authority to change its superannuation entity licence into a banking licence. Mr Omran says 500,000 Australian Muslims form a market worth an estimated A$1.3 billion. "If we get enough momentum from the industry it may be less than three years,' said Mr Omran. Page 18. Continued...
