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THE AUSTRALIAN FINANCIAL REVIEW (www.afr.com)
International petroleum giant Chevron yesterday announced that it will exchange its 17.5 percent holding in Woodside Petroleum's Browse liquefied natural gas venture off the coast of Western Australia with rival multinational Royal Dutch Shell in a US${esc.dollar}2 billion-plus deal. The agreement will result in Chevron acquiring Shell's holding for two licences in the state's Carnarvon Basin and US${esc.dollar}450 million in cash, conditional on the support of the relevant governments. Page 13.
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Pipeline Partners Australia yesterday admitted that it could no longer compete in the auction for the Hastings Diversified Utilities Fund, with the Canadian-Australian alliance saying it had "no intention" of matching the A${esc.dollar}1.4 billion cash and scrip bid for the fund by natural gas infrastructure firm APA Group. "Clearly, on balance, this is a signal that Pipeline Partners is less willing to go on," Han Xu, analyst at investment bank UBS, said. Shares in HDF closed 1.2 percent lower at A${esc.dollar}2.56. Page 15.
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Credit ratings firm Moody's Investors Service yesterday published a report that commended the asset quality and the financial prudence of Australia's mutual financial groups, but stated that building societies and credit unions lacked the market influence to compete on even terms with the four major domestic lenders. "Moody's believes the industry will not be able to significantly increase its market share despite Government moves to promote competition," Daniel Yu from the agency said. Page 15.
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David Trude, chairman of EL&C Baillieu, yesterday said that consolidation was a positive for the stockbroking industry, with his firm set to merge with Melbourne-based peer FW Holst. "I'm supportive of consolidation across the industry and, with the state of the market as it is, I do believe there will be more consolidation," he added. Baillieu Holst will have over A${esc.dollar}8 billion of funds under advice and more than 50,000 clients. Page 16.
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THE AUSTRALIAN (www.theaustralian.com.au)
The Australian Tax Office has launched an inquiry into the A${esc.dollar}9.9 million sale of a property, with the probe investigating the insolvency and banking sectors. The incident arose after testimony to an upper house committee earlier this month, by the principal of law firm Levitt Robinson, Stewart Levitt. Mr Levitt said that on behalf of the collapsed Lauderdale property developer, he sold an incomplete property to financier Bankwest for A${esc.dollar}9.9 million. The dispute concerns whether A${esc.dollar}900,000 in goods and services tax payments should have been paid to the Tax Office or Bankwest. Page 21.
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Murray Bailey, head of Chinese-backed miner Yancoal Australia, said yesterday that the trading environment for coal was poor and was expected to remain that way throughout the rest of the year. "In the third quarter, spot prices for all metallurgical coal are weakening we are seeing limitations in the buying behaviour of the Chinese steel mills because of their high stocks and the fact that the Chinese economy has slowed in relation to net coal, iron ore and steel production," Mr Bailey said, adding that Yancoal was reviewing its expansion plans. Page 21.
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Television networks vying for the rights to broadcast the National Rugby League are pushing the code's Australian Rugby League Commission to accept a larger level of advertising as part of the overall package. Observers say the move, if successful, will make it likely that the cash value of any deal would be less than A${esc.dollar}1 billion. Pay television network Foxtel , as well as free-to-air networks Ten Network , Seven Network and the incumbent rights holder Nine Network all made presentations last Friday. Page 21.
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Egan Associates, one of the leading remuneration advisory firms in Australia, yesterday warned that listed companies would find it increasingly difficult to justify bonus payments and pay increases in the current corporate situation. The group forecast more incentives to be delayed over the course of the current reporting season, with chief executives forgoing bonuses and accepting salary freezes. Page 21.
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THE SYDNEY MORNING HERALD (www.smh.com.au)
BlueScope Steel yesterday forecast that it would only "break even" over the second half of the year as concerns increased that Chinese producers would dump steel products through Asia and Australia. "There is no doubt Chinese product is trying to find its way around the region post the [global financial crisis] China's steel industry had been over-stimulated and we'll see a significant restructuring of the Chinese steel industry in the next few years," Paul O'Malley, chief executive of the steel manufacturer, said. Page B1.
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Ralph Norris, former chief executive of Commonwealth Bank of Australia, was paid A${esc.dollar}9.61 million, or around A${esc.dollar}63,000 a day, in his last five months at the lender, close to the average Australia's yearly wage. The revelation was made during the full-year results presentation for the bank, which is now attempting to restrict executive pay as a response to a slowdown in lending. According to Commonwealth Bank's accounts, A${esc.dollar}51.7 million was the total remuneration for its top 12 executives in 2011-12. Page B1.
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Peter Brown yesterday confirmed that he would retire as chief executive from FKP Property Group after nearly a decade in the role. Mr Brown announced that he will stay in the role no longer than February, as a search is conducted for his replacement. His retirement follows last week's revelation that Nick Collishaw would quit as managing director of rival developer Mirvac. Matthew Quinn also recently announced his departure from residential builder Stockland . Page B2.
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Stuart Irvine, chief executive of Nestle's businesses in Eurasia and Russia, yesterday was announced as the new chief executive of Lion, which earlier this year overtook rival Foster's to become the largest brewer in Australia. Mr Irvine will join Lion, which recently secured the rights to distribute the Corona imported beer in Australia. Lion also secured the rights to distribute Stella Artois and Guinness from Foster's. Page B2.
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THE AGE (www.theage.com.au)
Ken Henry, former secretary of the Federal Treasury, yesterday said that federal and state governments needed to obtain increased tax revenue to have the necessary funds to cover Australia's burgeoning infrastructure requirements of future decades. "At the moment it looks OK for the resource-rich states, and for the others it looks desperately bad. But even for the resource-rich states at some stage the royalties will deliver less revenue than they are presently delivering," Dr Henry, who is a member of National Australia Bank's board and an economics adviser to the Prime Minister, said. Page B3.
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NIB yesterday announced a 3.2 percent increase in full-year profit to A${esc.dollar}67.6 million, with the health insurer's managing director Mark Fitzgibbon noting that the company lost 9.6 percent of its health insurance members in the 2011-12 financial year. "With the heavier marketing investment spend right across the industry, the emergence of the aggregators, the ease by which people can transfer their insurance these days online, and of course the policy of portability I think we are entering a new paradigm," Mr Fitzgibbon stated. Page B3.
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The New South Wales Court of Appeal yesterday heard that the five-year corporate ban imposed on Meredith Hellicar and Michael Brown, former chairman and non-executive director of building products manufacturer James Hardie, was a "manifest error" that should be redacted to a two-year ban or less. The pair were banned due to the release of a draft press release to the Australian Securities Exchange in 2001 that misleadingly said James Hardie had enough funds to compensate sufferers of asbestos-related problems as the firm was restructured. Page B3.
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Fund manager Challenger yesterday cited unstable investment markets for a 43 percent fall in the company's full-year net profit to A${esc.dollar}149 million. Despite the result, the company's funds under management rose by nearly a third to A${esc.dollar}31 billion courtesy of the takeover of MIR Investment Management. "We're uniquely placed to benefit from the structural changes occurring in the retirement-savings market, while at the same time retaining a large exposure to any sustained recovery in equity and credit markets," chief executive Brian Benari said. Page B3.
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