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PRESS DIGEST-Australian Business News - June 12

Source: Reuters - Tue, 11 Jun 2013 20:52 GMT
Author: Reuters
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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)

To benefit from the growing demand for food from Asia and proximity to the region, Australia needs increased investment in agricultural infrastructure, says United States global food giant Archer Daniels Midland grains group president Ian Pinner. Pinner is promoting ADM's bid to takeover grain storage and logistics specialist GrainCorp. Page 13.

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Virtus Health <IPO-VHP.AX>, the first publicly listed provider of fertility services in the world, ended its first day's trading on the Australian Securities Exchange at A$6.20, 9.15 percent up on its listing price of A$5.68. With around 20 percent of its shares changing hands, the value of the company reached A$493 million. Page 13.

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Two senior Deutsche Bank executives will leave the company, with Australian executive chairman John Macfarlane to retire in December and corporate finance chief Scott Perkins to depart in July. Adding to his responsibilities for equities and fixed income, currencies and commodities in Asia Pacific, Michael Ormaechea will take the role of head of corporate banking and securities for Australia and New Zealand. Page 13.

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NewSat, a A$230 million company, may bid for the A$2 billion-plus satellite division of Optus. NewSat has been approached by a number of private equity funds and investment banks to partner in an offer for the Optus asset, says NewSat chief executive Adrian Ballantine. Page 15.

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A syndicate of international banks will provide Vodafone Hutchison Australia a A$3.5 billion loan, with Australia and New Zealand Banking Group and Commonwealth Bank of Australia understood to be involved. Vodafone faces further financial losses over the next few years, has debt of A$1.3 billion maturing in June and its spectrum licenses require renewal this year at what Andrew Levy of Macquarie Capital estimates as A$597 million. Page 16.

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China's fourth-biggest steel maker, Ansteel, will inject A$60 million into Gindalbie Metals joint-venture iron ore magnetite Karara Project in Western Australia, subject to regulatory approvals. Should the loan be converted into equity, Ansteel would have a 52.17 percent controlling stake in the project. Page 16.

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Australia and New Zealand Banking Group will retain its 20 percent stake in Shanghai Rural Commercial Bank and 17.6 percent holding in Bank of Tianjin, says chief executive Mike Smith. ANZ's strategy is to build its Chinese yuan deposit base in the expectation that the Chinese government will lift the 20 percent cap on foreign ownership of Chinese banks. Page 17.

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

ASX Limited has surprised the market with the announcement of a A$553 million underwritten rights issue. The raising will be used to provide additional equity of A$200 million for the ASX Clear (Futures) operation, to change to equity ASX Clearing Corporation's current A$250 million non-recourse debt facility and make available A$90 million for undefined growth initiatives. Page 19.

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United States global food giant Archer Daniels Midland has increased spending planned for the logistics infrastructure component of GrainCorp from A$250 million to A$300 million as part of its offer for GrainCorp. ADM is working to allay grower fears that access restrictions will be applied to competitors wishing to use GrainCorp's grains transport, storage and export assets that dominate the market. Page 19.

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The potential 437 trillion cubic feet of gas and 17.5 billion barrels of oil contained in shale formations across Australia are expected to develop at a "moderate pace" according to a United States (US) Department of Energy report on global shale resources. The lack of infrastructure available for remote deposits in Australia will prevent a boom developing as quickly as that underway in the US, the report states. Page 20.

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Resource services provider NRW Holdings has announced a profit downgrade for 2012-13. Revenue expectations have been lowered from between A$1.4 billion and A$1.5 billion to around A$1.3 billion with net profit after tax dropping from between A$84 million and A$90 million to between A$73 million and A$76 million. Page 20.

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Pre-approval development capital of US$500 million is likely to be outlayed by BHP Billiton on its Canadian Jansen potash project, according to analysts at Goldman Sachs. Potash is an option that may become significant for BHP, new chief executive Andrew Mackenzie said last week. Page 20.

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New employment opportunities in construction and mining will be hard to find during the third quarter, according to a survey of 1,900 companies across Australia by recruitment company Manpower. The survey found the employment outlook rating for these sectors was 10 percentage points down on last year. There was more optimism in South Australia state and the Northern Territory, while Queensland exhibited the steepest drop in employment expectations. Page 21.

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Specialist telecoms construction company Service Stream has gone into trading halt with its shares, at A14 cents, close to an all-time low. Problems with its fixed communications division and its Syntheo joint venture with Lend Lease caused the halt, according to sources close to the company. Page 21.

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Toyota Australia announced an after-tax profit of A$149 million for the 12 months ending March 31. Revenue of A$8.9 billion was 23 percent higher than the previous year. Production at the Altona plant in Melbourne reached 99,441 units, up nearly 7 percent. Page 21.

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

The manufacturing sector received over A$7 billion in assistance from the Australian government last financial year, according to the Productivity Commission review of assistance provided to industry by government. Over A$1 billion in subsidies was provided to both cars makers and steel producers through direct funding and tax concessions, with concessions worth A$845 million given to insurers and banks. Page 25.

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The major challenge facing mining companies is capital risk, with large miners affected by reductions in commodity prices that impact growth plans while explorers have increasing difficulty attracting capital funding that some need for survival, according to an Ernst & Young global survey. The group's global mining and metals chief, Mike Elliott, says the situation for a sector that operates on long-term timeframes is exacerbated by an increased focus on short-term returns by shareholders. Page 27.

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Rio Tinto is close to selling a 29 percent share of Coal & Allied, operator of coal mines in the Hunter Valley region in News South Wales state and the Clermont region in Queensland, with an estimated value of A$3.2 billion. Interested parties include Shenhua from China and the Aditya Birla Group from India. Page 27.

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THE AGE (www.theage.com.au)

Over 100 jobs will be lost at Seven West Media as the company seeks cost reductions of A$100 million this year under new chief executive Tim Worner. Perth's daily newspaper, The West Australian, will lose at least 33 journalists with 40 positions being cut. Page 24.

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All staff working at the Geelong headquarters of retail chain Target have been asked to be onsite Wednesday morning for announcements about job cuts, with around 200 redundancies expected. The Geelong employment situation will also be impacted by the closing of the Ford car making plant in 2016 and the likely conversion of Shell's oil refinery into a terminal. Page 27.

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