Press Digest: Australian Business News - July 17
16/07/2013 22:03
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) The scrip offer for natural gas distributor Envestra Limited from Australia's largest natural gas infrastructure business APA Group values Envestra equity at A$2 billion, stated APA chairman Len Bleasel yesterday after announcing the bid. The claimed 10 percent premium over current value was "more like a 1 percent premium" responded Envestra managing director Ian Little, expressing scepticism that there were benefits for Envestra shareholders in the offer. Page 15. -- Troubled sports and casual wear company Billabong International BBG.AX yesterday announced a refinancing deal with an Altamont Capital Partners-led consortium by which shareholders may lose as much as 40 percent of their holding. The deal was subject to shareholder approval, and was the best obtainable, said Billabong chairman Ian Pollard. Chief executive Launa Inman will be replaced by Scott Olivet, formerly chief of sports equipment firm Oakley, Inc. Page 15. -- Rio Tinto RIO.AX yesterday reconfirmed guidance for global iron ore production of 265 million tonnes for 2013 and said the increase to 290 million tonnes a year was on time and budget. Second quarter global iron ore production for Rio at 66 million tonnes was a 7 percent rise over the previous corresponding quarter. The expansion of port, rail and power infrastructure to handle a possible increase to 360 million tonnes a year was underway, the miner also confirmed. Page 17. -- Stuart Irvine, chief executive of Lion, Australia's largest brewer and second largest diary processor, yesterday outlined a 10-year strategy for the company to increase sales and profits in an environment where profits have been halved over the last three years. The company will engage further with Asian markets, develop new products and move into new categories while maintaining a cost-cutting focus, said Mr Irvine. Page 17. -- Mondelez International MDLZ.O , formerly Kraft Foods, lodged accounts with the Australian Securities and Investments Commission showing Kraft Australia Holdings for calendar year 2012 increased its profit over the previous year by 64 percent from A$45.8 million ($42.28 million)to A$74.9 million ($69.14 million). Mondelez produces over 22 million jars of Vegemite a year and its Cadbury chocolate operation increased its share of the A$2 billion Australian chocolate market to about 51 percent. Page 18. -- Laboratory testing services firm ALS Limited has acquired United States-based oil and gas services specialist Reservoir Group for A$580 million ($535.43 million). As part of the debt, equity and cash funding package, ALS is instigating a 1-for-11 rights issue to raise A$246 million. The company wanted to keep funds available for further acquisitions, said managing director Greg Kilmister. Page 18. -- A compound annual growth rate of minus 1.9 percent over the next three years for the earnings before interest, tax, depreciation and amortisation of Fox Sports Australia has been forecast by Andrew McLeod, a media analyst with Morgan Stanley. The company is a good asset, but is relatively mature, commented Mr McLeod, with earnings growth limited by the high cost of programming and limited growth of subscribers. Page 18. -- The Lazard Select Australia Equity share fund, managed by Robert Osborn of Lazard Asset Management, was the best performing Australian equity fund for 2012-13, according to a survey by financial services consulting firm Mercer. The fund plans to continue its underweight loading for banks and overweight focus on the retail sector and remain cautious with holdings in the resources sector. Following Mr Osborn's fund in the performance ratings were: Perpetual Wholesale Ethical, Perpetual Wholesale Share-Plus, Lazard Australian Equity and Bennelong Concentrated Strategies. Page 19. -- Invast Securities 8709.T , one of the largest contracts for difference and foreign exchange broking groups in Japan, will open for business with retail and institutional clients in Australia on Friday. Brendan Gunn, formerly of rival GFT, has been appointed chief executive of Invast Australia, which will start with 18 employees locally and aims to have 30 by the end of the year. Page 19. -- THE AUSTRALIAN (www.theaustralian.news.com.au) Etihad Airways has been buying shares in Virgin Australia VAH.AX over the last fortnight since the Foreign Investment Review Board approved the request to take its holding from 10 to 19.9 percent. We fully support John Borghetti, Virgin's chief executive, and his team, said Etihad chief executive James Hogan, and will keep buying into the airline when the price is fair and right. There is market speculation that Virgin will offload more shares if the current price around A45 cents rises to around A50 cents. Page 17. -- The Federal Labor government changes in fringe benefits tax relating to cars will have a significant impact on Holden and Ford as up to 25 percent of new cars were purchased under "remuneration-related" arrangements, said Matthew Honan, managing director of salary-packaging company Remunerator. The salary-packaging sector may struggle to survive, said Smartsalary's chief Simon Ellis, while shares in the largest salary-packaging company in Australia, McMillan Shakespeare fell 15 percent yesterday. Page 17. -- Explosives maker Orica ORI.AX has signed a contract with Strike Energy, a coal seam gas-player operating in the Cooper Basin of South Australia, providing funding for a Strike pilot program in return for cheaper gas. Orica will invest an initial A$2.5 million and up to a further A$50 million ($46.16 million)depending on progress, and aspires to receive 150 petajoules of gas over the next 20 years for a total outlay over A$450 million ($415.42 million). Page 18. -- Glencore Xstrata GLEN.L will mothball its Ernest Henry magnetite extraction plant next month, ending its A$80 million ($73.85 million)experiment to supplement its copper-gold operation in Cloncurry, Queensland, with magnetite production. The Ernest Henry mine will refocus on copper and gold production as the lower price of iron ore combined, with an expensive logistic operation, made the iron ore mining a loss-making venture. Affected staff, estimated to number about 12, will be redeployed Glencore Xstrata stated. Page 18. -- The takeover of GrainCorp GNC.AX by United States agribusiness giant Archer Daniels Midland (ADM) was recommended by the board because it was in the best interests of shareholders, said GrainCorp chief executive Alison Watkins to Senate Rural and Regional Affairs Committee chairman Bill Heffernan. The ADM offer of A$13.20 ($12.19) per share was a 50 percent premium on the trading price of GrainCorp and as a cash offer provided certainty to shareholders, explained Ms Watkins, who added that evaluation of the corporate conduct history of the buyer was not part of her role. Page 19. -- The attempt by Macquarie Group MQG.AX to take control of a A$500 million ($461.58 million)portfolio of managed investment schemes from Gunns' receivers KordaMentha has been blocked in the Victoria Supreme Court. Justice Ross Robson yesterday ruled that material provided to investors as they voted to appoint Macquarie Forestry Services to manage and WA Blue Gum to become the new responsible entity was misleading and deceptive. Page 19. -- Commonwealth Bank of Australia CBA.AX has revised advertising related to "protected loans" following claims by the Australian Securities and Investments Commission (ASIC) that the ads may mislead customers over interest costs. HSBC has also revised information on its website related to certain structured products as ASIC determined statements were potentially misleading due to a risk of losses. Page 19. -- Andrew Sigalla is facing allegations, detailed in 37 folders of evidence compiled by the Australian Securities and Investments Commission, that as chief executive and director of technology company TZ he used A$6.1 million of company money to pay gambling debts and his mortgage. The 37 folders outline "the flow of funds from a public company over three years" said lawyers for Mr Sigalla yesterday. Page 19. -- Qantas Airways QAN.AX yesterday announced it had concluded a A$7 million ($6.46 million) deal with the government of Northern Territory (NT) as part of its new tourism strategy. Qantas has moved away from its A$44 million deal with Tourism Australia to cooperative agreements with the individual states and territories of Australia. The NT deal takes the value of the state-based agreements negotiated so far to A$49 million. Page 24. -- THE SYDNEY MORNING HERALD (www.smh.com.au) Commonwealth Bank of Australia CBA.AX has issued A$1.25 billion ($1.15 billion) in bonds paying 85 basis points above the benchmark bank bill swap rate and maturing in four years. The bond price was relatively good from the bank's perspective, said Deutsche Bank head of Australian credit research and strategy Gus Medeiros. Page 27. -- THE AGE (www.theage.com.au) Australia's two largest supermarkets, Woolworths WOW.AX and Coles, should share efficiencies developed in the supply chain with suppliers, said the new chief executive for brewer and diary processor Lion, Stuart Irvine. Logistic efficiencies established by suppliers and retailers should be shared in a win-win mode as part of a collaborative and constructive relationship, said Mr Irvine, who is taking up his role in a situation where the big retailers have been pushing suppliers to operate with heavy discounts and reduced margins. Page 23. ((Sydney Newsroom +61-2 9373 1816; sydney.newsroom@allreleases.net)) ($1 = 1.0832 Australian dollars) Keywords: DIGEST AUSTRALIA BUSINESS