PRESS DIGEST-Australian Business News - June 18

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)

Tjeerd Jegen, director of supermarkets at Woolworths , announced that the retailer's latest refurbishment program, which is designed to increase sales of fresh food, will require "a significant amount of money". "We are taking all the theatre elements of our stores such as the sushi chef and bakers baking fresh bread, and these elements are being integrated into many stores across the country," Mr Jegen said. Page 15.

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Wagering and gaming group Tabcorp is considering allowing punters to bet on the local commodities and sharemarket indices in what would be a first for Australia. "Tabcorp is always looking at the global marketplace in terms of wagering offerings ... In other parts of the world they bet on financial markets and we are at the evaluating stage with that," Craig Nugent, managing director of fixed odds betting at Tabcorp, said. Page 15.

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Local thermal coal producers may be forced to abandon planned expansions and start reducing supply following a slump in the commodity's spot price over the last few years. The spot price of thermal coal is currently A${esc.dollar}88 a tonne, A${esc.dollar}11 higher than the lowest point for the commodity's price during the global financial crisis. "The reason we are close to a floor is the Americans are cutting production. If the Australians also cut production that will be a powerful symbol to the market," Tom Price, commodities analyst at investment bank UBS, said. Page 17.

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NewSat is today expected to reveal that the United States' Export-Import Bank has provided the satellite communications firm with a A${esc.dollar}300 million low interest loan on the proviso that it can complete a A${esc.dollar}200 million equity raising. The capital will be used to fund the launch of the Jabiru-1 satellite, which is expected to cost more than A${esc.dollar}500 million. Observers say the raising could almost double the company's market capitalisation and should be one of the largest raisings this year. Page 17.

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THE AUSTRALIAN (www.theaustralian.com.au)

Echo Entertainment Group's A${esc.dollar}454 million capital raising has received the backing of the majority of the casino operator's institutional investors, with more than 95 percent accepting the one-for-five renounceable entitlements. The support would increase the company's financial flexibility, be used to reduce gearing and would contribute to a more apt capital structure, chief executive Larry Mullin said. Page 19.

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John Horner, strategist at diversified financial services group Deutsche Bank, yesterday predicted that the Australian dollar would significantly fall should the Syriza party win office in the Greek elections. The party has pledged to abandon financial austerity measures agreed with other European nations under the terms of its bailout. "There could be a fall back down to the lows we saw a couple of weeks ago. Around 97 U.S. cents could be seen in swift order in the early part of the coming weeks should events in Europe take a turn for the worst," Mr Horner added. Page 19.

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A senior banker who recently contacted a significant number of sovereign wealth funds and central banks around the world said the majority are looking to increase their level of Australian assets. The banker, who wished to remain anonymous, added that the Australian dollar was most likely overvalued by approximately 10 percent, given that economies in China and the United States are slowing. Page 19.

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Lynas Corporation is preparing for another stoush with opponents to its controversial rare-earths processing facility in Malaysia, after local politicians approved a temporary licence for the A${esc.dollar}200 million plant. Three Malaysian residents had appealed the awarding of the licence, but the Malaysian Ministry of Science, Technology and Innovation last Friday allowed the Australian rare-earths producer's venture to proceed. The Save Malaysia Stop Lynas organisation is anticipated to appeal the decision. Page 20.

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

Figures from RateCity have shown that the latest round of interest rate cuts by the Reserve Bank of Australia have benefited small businesses the least. According to the financial comparison website, the average rate for small business loans across the major Australian banks has fallen by 100 basis points to 7.53 percent, while the average rate for home owners has dropped by 103 basis points to 6.76 percent. Page B1.

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Russell Jones, global head of fixed income strategy at Westpac Banking Corporation, yesterday said global investors would "sell first and ask questions later" if the far-left Syriza party wins the Greek elections, the preliminary results of which will be known early this morning. The Australian stockmarket, which gained 15 points last Friday, will be the first to respond to the results. Page B3.

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A merger between the deals.com.au and Ouffer Australia retailers is set to proceed, which would create a merged online business with A${esc.dollar}38 million of revenue this year and 1.4 million members, according to the former. "We're very excited to be working with an amazing team of under-35 Australian and [United States] entrepreneurs, with a cross-section of exciting skills and ideas, that will make the new company a force to be reckoned with," Jeremy Same, director of deals.com.au, said. Page B3.

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Reed Construction Australia mailed employees last week warning them that it is still owed "well in excess" of A${esc.dollar}60 million in payments, but the troubled builder admitted that it was not likely to receive the full amount. Workers were also informed that they would only receive one week's wages as the company entered voluntary administration due to "the progress with the resolution of claims with the [New South Wales] government and after the recent premature terminations by Roads and Maritime Services of our civil projects". Page B3.

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THE AGE (www.theage.com.au)

The second largest manufacturer of Australian-made guitars, Cole Clark, has appointed Miles Jackson as chief executive following the departure of co-founder Bradley Clark. Mr Jackson yesterday said that the company, which makes up to 100 handmade instruments a week, had never met demand for its iconic ukuleles and guitars, most of which use blackwood from Tasmania, Queensland maple or other Australian tone-woods like bunya. "The Aussie woods are always a bonus in that fat bottom end of a hollow-body instrument," guitarist Xavier Rudd said. Page B3.

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Phil Mason, a former executive at entertainment conglomerate Disney and founder of independent video game studio Bubble Gum Interactive, yesterday said he hopes his company will have 20 million users playing its Little Space Heroes online children's game by the end of next year. "We've seen the huge potential for virtual worlds for kids because there are 250 million kids worldwide aged 6 to 12 who have access to the internet, and that number is growing," the studio's marketing director Paul Gray said. Page B4.

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Wine producer Casella Wines has revealed that it will begin brewing its first beer at the company's site in New South Wales in a bid to lure drinkers from labels produced by rival brewers Foster's Group and Lion. The beer, called Arvo, will be produced in six-packs and slabs of 24, with the latter selling for between A${esc.dollar}44.99 and A${esc.dollar}49. "It's a premium beer, it's not the bottom end, and it's about the product, the flavour and that here is an Australian offering in that price category, which I think is really poorly lacking at the moment," Casella's John Casella said. Page B7.

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Rob Joyes, director in charge of Melbourne East for real estate group Colliers International, said that Richmond was currently the most popular metropolitan office area in Melbourne. "A lot of tenants are looking to move into Richmond from suburbs a little farther out from the city, such as Hawthorn and Camberwell....These tenants are trying to make their business become demographically and geographically more central," Mr Joyes said. Page B8.

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