March 14, 2012 / 8:33 PM / 6 years ago

PRESS DIGEST-Australian Business News - March 15

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)

Andrew Brown, head of debt solutions at UBS Investment Bank, yesterday said the cost of “all forms of extending credit” had risen since the global financial crisis.

“Corporates are paying more for bank loans and a derivative line is the same thing,” Mr Brown added. Local firms, including Wesfarmers, Woolworths and Telstra, raised A$22 billion in financing from global bond markets last year, twice the amount raised inside Australia. Page 27.

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Alex Pollak, analyst at investment group Macquarie, yesterday declared in a report that electronic media groups with radio and television will be able to weather audiences transferring to online channels because they will be able to more easily secure content to advertising.

“Free to air television is a closed eco-system - no outside advertisers can cut the broadcaster out of harvesting the advertising,” Mr Pollak noted. Page 29.

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Ludowici has revealed that it should finalise a A$325 million takeover offer from Danish engineering firm FLSmidth by the end of the financial year. The board of the mineral processing equipment manufacturer yesterday reconfirmed its backing of the A$11 a share bid from FLSmidth in the absence of a higher bid.

The Danish group had been competing with Scottish firm Weir to acquire the Australian group, but the latter opted to walk away from the bidding war earlier this week. Page 29.

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Andrew Price, the shareholder responsible for sparking a stoush between shareholders and the board of PaperlinX, yesterday said he would abandon a shareholder vote to oust Harry Boon as chairman of the paper manufacturer if it could present a “viable strategic plan” to revive the company.

“What I am seeing is a plan that guarantees to deliver ongoing losses for years to come. They have only published forecast cost savings but refuse to shed light on the other side of the ledger - revenue and gross profit,” Mr Price said yesterday. Page 29.

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THE AUSTRALIAN (www.theaustralian.news.com.au)

Chase Carey, chief operating officer and president of News Corporation, yesterday said part of the reason for his visit to Australia was to explore “how  we take advantage of the strengths of [News Corp’s Australian] business”.

Mr Carey’s visit came at the request of Kim Williams, the recently appointed chief executive of the media conglomerate’s local operations, News Limited. Mr Carey added that the media conglomerate was not going to divest from its newspaper and publishing divisions, although shareholders had raised the idea. Page 19.

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National Australia Bank has reportedly received A85 cents in the dollar for its A$80 million exposure to media group Nine Entertainment.

Nine and its private equity owner CVC Asia Pacific are currently preparing to brief investors across the United States and Britain over the next week, with the media group having to refinance A$2.7 billion in senior debt before it matures early next year. Page 19.

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Bell Potter Securities yesterday announced that 25 percent of its analysts were being made redundant, making the broker the last firm in the industry to cut jobs.

“We are part of the industry but we are taking the view that we are going to specialise in what we are good at, and unfortunately that has meant we have made some changes to the business,” Charlie Aitken, managing director of Bell Potter, said. Page 19.

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David Murray, the outgoing chairman of the Federal Government’s A$73 billion Future Fund, yesterday supported a proposal by Western Australia to establish its own sovereign wealth fund.

“It is states that generally collect the royalties from the depletion of the mineral assets in the ground, so there is an issue of the inter-generational nature of the assets,” Mr Murray said. The Future Fund is the 13th biggest sovereign wealth fund in the world. Page 20.

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THE SYDNEY MORNING HERALD (www.smh.com.au) A consumer sentiment survey from Westpac Banking Corporation and the Melbourne Institute has found that 43 percent of those surveyed feel their financial situation has deteriorated over the last 12 months, while only 19 percent believe their finances have improved.

However, 50 percent of respondents said it was a good time to purchase a “major household item”. “We have found actual purchases to be much more closely related to how they feel about their finances,” Bill Evans, chief economist at the lender, said. Page B1.

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The financial standing of Hancock Prospecting, the mining explorer owned by billionaire Gina Rinehart, and its ability to distribute payments to the Rinehart children could be affected by a separate legal dispute, according to documents unveiled in the Rinehart family’s ongoing court battle.

Hancock is currently appealing a ruling that awarded the ownership of the Rhodes Ridge asset in Western Australia to rival Wright Prospecting, a decision that could affect the ability of Ms Rinehart’s company to fund the Roy Hill venture in the same state. Page B3.

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A suggestion by media magnate Clive Palmer to establish a blind trust to invest in local media has received support from observers. Paul Murphy, acting federal secretary of the Media Entertainment and Arts Alliance, the union which represents journalists, yesterday said it would “welcome any new initiatives that keep journalists in work and preserve independent and quality journalism”.

“We welcome any new private funding in the media from people who are genuinely not seeking to buy editorial control,” Mr Murphy added. Page B4.

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Mobile phone networks are set to charge customers more for handsets, with Telstra, Optus, and Vodafone Hutchison Australia increasing prices 18 months after the former sparked a price war, according to research from Commonwealth Bank of Australia.

The research, outlined in a note to clients yesterday, found that subsidies were at “near-record lows” for iPhones, while telecommunication firms had begun to compete on areas other than price, such as the performance of their mobile broadband networks and additional services. Page B4.

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THE AGE (www.theage.com.au) Legal and business organisations have claimed in submissions to Federal Treasury that draft legislation designed to safeguard creditors and staffers from phoenix company operators could stymie ventures and damage innocent company directors.

The Law Council of Australia said that “not all phoenix activity involves name reuse, and the present proposal will not catch phoenix activity not involving name reuse no matter how egregious it is”. Page B1.

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Chris Campbell, partner at diversified professional services firm Deloitte and the liquidator of MF Global’s Australian operation, yesterday said investors had offered to buy out local clients of the failed contracts for difference provider.

While Mr Campbell said he did not know the identity of the bidders, he admitted that “if they offered me A90 cents on the [United States] money that we’re trying to recover, I’d have to take it to my committee for approval”. Page B3.

-- The chairman-elect of the Federal Government’s A$73 billion Future Fund, David Gonski, yesterday told an Australian Institute of Company Directors luncheon that businesses should appoint more women to their boards.

“We need to broaden the base of the people on boards. We obviously need to draw from 100 percent of the population  to draw from 49 percent of the population cannot possibly be as good as choosing the best from the whole 100 percent,” the prominent businessman said. Page B3.

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Federal Treasury’s Graeme Cuxson yesterday told the national convention of the Tax Institute that there was an argument for postponing the introduction of reforms to Australia’s 660,000 trusts beyond July 1 next year.

“This is not about wholesale reform, this is not a crackdown  it is about easing compliance costs,” Doug Cameron, senator for the Labor Party, said of the reforms. Page B3.

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