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PRESS DIGEST-Australian Business News - July 2

Source: Reuters - Mon, 1 Jul 2013 08:10 PM
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)

Director of AGL Energy Limited, John Stanhope, is calling for an "end to end" review of electricity industry to provide companies with stronger incentives to cut costs. Stanhope said recent electricity prices were not only affected by the carbon tax, but also the industry's infrastructure arrangements. Page 15.

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Private equity fund Australian Food and Fibre (AFF) will purchase rural property owner PrimeAg for A$45.1 million ($41.58 million), acquiring the remaining shares in the company for a 16.4 percent discount from its current book value. In a separate deal, AFF agreed to sell its agricultural assets in Emerald, Queensland to Cowal Agriculture Holdings for A$30.9 million, a 39.5 percent discount on the book value as of December 31. Page 17.

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Rio Tinto is waiting for approval from the Mongolian government to commence shipping from its A$6 billion Oyu Tolgoi project. The delays come despite incumbent president Tsakhia Elbegdorj's re-election last week. Turquoise Hill Resources, which manages the project and is majority owned by Rio, said over 40,000 tonnes of concentrate is ready for shipment from the world's largest copper-gold-silver mine. The Mongolian government owns a third of the mine. Page 17.

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Australian Shareholders' Association (ASA) has sought a meeting with Leighton executives after controlling shareholder Hotchief increased its 53.5 percent stake in the company to 54.96 percent with plans to buy further shares. The changes will break a longstanding covenant under which Hochtief had agreed not to lift its stake above 55 percent. ASA chairman Ian Curry said he was concerned the interests of Leighton's smaller shareholders were being neglected. Page 18.

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Chief executive of Phosphagenics Esra Ogru has been suspended pending an investigation by independent legal and accounting experts. Dr Ogru was responsible for financial activities, strategic direction and management of operations in which the biotech firm found accounting irregularities which may be "material". Page 18.

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Wealth management firm BT Financial Group has refunded 1890 customers a total of A$2.3 million for incorrectly charging advice fees in excess of disclosed percentage rates. BT is yet to view a further 20 percent of accounts thought to be eligible for the refund but aims to do so by August. Page 19.

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QBE Insurance Group will update investors on its plan to deliver A$250 million in run-rate savings by 2015 at a briefing on Tuesday. QBE appeared on track to achieve its fiscal 2013 guidance, according to CIMB analyst Richard Coles last week. Page 19.

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Australia and New Zealand Banking Group (ANZ) could announce its hybrid debt issue of up to A$1 billion as early as this week, ahead of the Westpac Banking Corporation issue pegged for the week beginning 8 July. ANZ's issuance is expected to be priced around 350 basis points above the bank bill swap rate with a 10-year term. Page 19.

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Errors in requests by the Australian Securities and Investments Commission to block Australian access to websites inadvertently restricted access to 254,000 websites on at least two occasions this year. At least ten requests were made to internet service providers Telstra, Optus, TPG and AAPT between October and April. The requests used Section 313 notices, legal 15-year-old legal powers, and blocked entire IP addresses instead of individual websites, inadvertently limiting access to thousands of legitimate websites. Page 25.

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

Drilling products and services company Boart Longyear yesterday announced its second cut to earnings guidance in six weeks, from between A$199 million and A$271 million to less than A$176 million, for 2013. Boart has renegotiated its debt covenants to increase its allowed gross debt to earnings before interest, tax, depreciation and amortisation ratio to 4.75 times, up from 3.5 times. Page 17.

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Bangalore-based mobile advertising network manager InMobi aims to generate A$100 million in revenue from its Australian operations in the next 18 months. InMobi predicts the Australian mobile advertising market will grow to A$300 million within three years, from a base of A$90 million in 2012 and has finalised deals with online ad provider Mi9, Fairfax Media and News Corp Australia. Page 17.

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The Australian Tax Office (ATO) will recruit ten financial experts from private accounting firms, including Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers, as part of a pilot program designed to introduce more private-sector experience to the tax office. Commissioner of Taxation Chris Jordan said the ATO will also better utilise external resources, such as retired Federal Court judges and independent experts to advise on "complex commercial matters". Page 17.

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Insurance broking network Steadfast is planning an initial public offering worth A$469 million, to be ready for trading on the Australian Securities Exchange by 14 August. The indicative price range for the listing is between A$1 and A$1.20 per share and will proceed if a minimum of A$160 million is raised. Steadfast's gross written premiums totalled around A$3.7 billion for the year to 30 June 2012. Page 18.

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Builder Watpac has been awarded a contract to upgrade 16 army bases for the Defence Department. The A$146 million contract covers upgrades for bases across Queensland, New South Wales, Australian Capital Territory and Victoria. Chief executive Martin Monro said around 400 specialist workers will upgrade as many as eight bases at a time, starting work this month. Page 18.

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Investment group Wilson HTM will remain in a trading halt until it makes an announcement regarding the two-month investigation into accusations of inappropriate behaviour towards female staff by managing director Andrew Coppin. An announcement is expected before the market opens on Tuesday. Page 19.

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Supermarket chain Coles has paid A$61,200 in six infringement notices handed down by the Australian Competition and Consumer Commission (ACCC) between March and May this year. The fines relate to misleading customers about the country of origin of fresh produce in five stores. ACCC chairman Rod Sims warned this is a "lesson to all retailers". Page 19.

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Seven Group chief executive Don Voelte recently signed an "unlimited term" contract worth up to A$7.2 million, including bonuses and incentives. The remuneration deal includes a fixed annual salary of A$3.2 million. Page 19.

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

BHP Billiton has increased the rate of the modernisation of its iron ore operations in the Pilbara region of Western Australia. The miner's integrated remote operating centre will open today and is the first step in a project designed to keep parity with Rio Tinto and will enable logistics and mining work to be conducted in the Pilbara from Perth. Page 21.

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The New South Wales (NSW) government will pay A$300 million in compensation to Origin Energy after abandoning plans to develop the Cobbora coal mine near Mudgee. Origin has purchased Eraring power station from the NSW government for A$50 million, which has risen in value since it is now able to source cheaper coal from nearby mines. Origin had previously agreed to long-term arrangements to purchase the output from the power station for A$659 million. Page 23.

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THE AGE (www.theage.com.au)

Figures released by Fitch Ratings show one in four borrowers across Australia were over 30 days in arrears on their mortgage in the six months to March. Mortgage delinquency rose from 1.2 percent to 1.45 percent, just below the five year average of 1.53 percent. "The Reserve Bank of Australia's decision to reduce the cash rate did not have a positive impact on mortgage performance," according to the report. Page 23.

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($1 = 1.0847 Australian dollars)

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