Today's Business Headlines

05/11/2008 - 06:42

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Allco crashes under $1bn debt burden; Receivers to take over ABC Learning; White knight tip emerges in battle for Mt Gibson control; ETS modelling under fire; Telstra issue broadband ultimatum

Today's Business Headlines

Allco crashes under $1bn debt burden
Allco Finance Group, the finance house that came within a whisker of part-owning Qantas Airways 18 months ago, has collapsed under $1.1 billion in debt and a flawed business model that failed to function during the credit crisis. The Fin Review

Receivers to take over ABC Learning
ABC Learning, the childcare centre operator that looks after 100,000 Australian infants and toddlers, is today expected to be swept into receivership after months of escalating financial trouble. The Australian

White knight tip emerges in battle for Mt Gibson control
Mount Gibson Iron could find itself targeted by a white knight suitor to stymie plans by two Chinese steel groups to all but seize control of the struggling miner, analysts said yesterday. The West

ETS modelling under fire
The Rudd government has dismissed calls for Treasury to conduct extra modelling into the economic cost of Australia acting to curb its greenhouse gas emissions if major polluters such as China and India refuse to adopt similar measures. The West

Telstra issue broadband ultimatum
Telstra Corp has thrown down a challenge to the federal government over the $4.7 billion national broadband network, saying it will not submit a bid on November 26 without an immediate guarantee that structural separation will be ruled out. The Fin Review

 

THE WEST AUSTRALIAN:

Page 1: The Reserve Bank yesterday slashed official interest rates by another 0.75 percentage points and left the door open to further cuts next month as fears grow that Australia will tumble into recession and that federal revenue growth is starting to fall.

Barack Obama is on the threshold of history today as he fights to become the first black US president.

Page 3: New evidence has emerged of the pressure on WA's declining fish stocks, with research revealing few breeding dhufish and low numbers of other popular species in a stretch of water between the Abrolhos islands and Cape Naturaliste.

Page 4: The Rudd government has dismissed calls for Treasury to conduct extra modelling into the economic cost of Australia acting to curb its greenhouse gas emissions if major polluters such as China and India refuse to adopt similar measures.

Page 6: The Emirates airline would "quietly" seek federal government approval to fly between Australia and the US, a senior airline official told a trade magazine yesterday.

Page 7: Industrial chemicals are pouring into some of Perth's best-known lakes and streams from stormwater drains, an analysis of water at sites across the metropolitan area has revealed.

Page 12: Chinese investment in two more Mid West iron ore companies justified his decision to seek Commonwealth funds for a joint investment in the controversial port at Oakajee north of Geraldton, Colin Barnett claimed yesterday.

The academic who recommended that teachers be given big pay rises in a bid to overcome the teacher shortage said they should accept the Liberal-Nationals offer because it was better than the one they had from the previous Carpenter government.

Business: Mount Gibson Iron could find itself targeted by a white knight suitor to stymie plans by two Chinese steel groups to all but seize control of the struggling miner, analysts said yesterday.

Allco Finance Group became the first major domestic corporate casualty of the global credit crisis last night when its board gave up a nine month-long fight to pay off its crushing debt burden and appointed an administrator to run what is left of the once high-flying combine.

Patersons Securities will focus its efforts on crimping costs in a bid to stay in the black after booking a shock 61 per cent fall in net profit for the year to June 30.

WA's top listed companies fell twice as much as the all-ordinaries index in October, losing 28 per cent of their sharemarket value as investors baled out of resources stocks in response to plunging commodity prices.

The corporate watchdog has called on prosecutors to consider launching an appeal after fallen mulch mogul Kevin Pollock walked away from the WA Supreme Court with a suspended sentence for his role in a $4 million series of frauds.

Consolidated Minerals has joined the long list of miners to slash jobs in response to the global financial crisis, less than a fortnight after hosing down rumours it was poised to cut jobs at some of its operations.

Woodside Petroleum has installed the first of about 260 Thai-built modules that will make up its Pluto liquefied natural gas plant on the Burrup Peninsula in WA's North West.

A week after TransAtlantic Petroleum Corp launched its surprise bid for Incremental Petroleum, the Canadian-listed group says it will fight any move to extend the deadline for shareholders to accept Cooper Energy's rival offer.

UBS last night posted a net profit of 296 million Swiss francs ($375 million) for the third quarter, its first after four consecutive quarterly losses.

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The Reserve Bank of Australia has again slashed interest rates by more than expected in a bid to stave off recession, as the federal government is set to concede the slowdown has almost wiped out its budget surplus.

Allco Finance Group, the finance house that came within a whisker of part-owning Qantas Airways 18 months ago, has collapsed under $1.1 billion in debt and a flawed business model that failed to function during the credit crisis.

The board of Australia's biggest child-care operator, ABC Learning Centres, is considering calling in administrators after failing to find a solution to the company's crippling debt and operational problems.

Telstra Corp has thrown down a challenge to the federal government over the $4.7 billion national broadband network, saying it will not submit a bid on November 26 without an immediate guarantee that structural separation will be ruled out.

Page 3: University graduates face the toughest employment market in more than a decade as the big employers of raw talent pull back.

Page 5: Banks held back from matching a surprisingly large drop in the official cash rate yesterday, saying they were hedging against an uncertain funding environment.

Page 7: Less than a week after a senior Reserve Bank of Australia official said high inflation was a major concern, the bank said it believed inflation would soon decline.

Page 8: Manufacturing, agricultural and tourism businesses will continue to reap the benefits of a weak Australian dollar for months to come, and yesterday's rate cut will grease the slide.

 

THE AUSTRALIAN:

Page 1: Plunging commodity prices and alarming signs of global recession have forced the Reserve Bank to cut interest rates by another 0.75 percentage points, and threaten to slice $10 billion off the Rudd Government's projected budget revenue.

Page 2: The Commonwealth Bank yesterday kicked off a new round of variable rate cuts, but blamed its own higher funding costs for holding back part of the Reserve Bank's reduction in the official cash rate.

Page 3: ABC Learning, the childcare centre operator that looks after 100,000 Australian infants and toddlers, is today expected to be swept into receivership after months of escalating financial trouble.

Page 7: One.Tel special-purpose liquidator Paul Weston yesterday told the NSW Supreme Court he agreed the $8 million in fees and expenses he had racked up since the company's collapse in 2001 was an extraordinarily large amount of money.

Business: After desperately clinging to existence for 10 months, courtesy of a $600 million lifeline from a syndicate of 12 banks, Allco Finance Group -- Australia's most complex and opaque financial engineering company -- fell quietly into the hands of its receivers last night.

Allco Finance Group, along with 70 companies inside the Allco network, became the first high profile victim of the credit crisis yesterday afternoon when a syndicate of banks pulled the plug and appointed receivers and managers to the debt-ridden corpse.

Telstra appears safe from any split of its retail and networks arms, with the federal Coalition's new communications spokesman, Nick Minchin, ruling out any such move and distancing himself from the previous policy under Brendan Nelson's leadership.

Debt-laden port and rail operator Asciano will kick off an international road show in Canada today to convince pension funds to buy up to 50 per cent of its coal haulage business, Pacific National, for between $800 million and $1 billion.

Australian iron ore miners will increasingly be forced to offer a stake in their company to Chinese steel players if they want to finalise off-take agreements for their product.

BHP Billiton said last night that EU regulators had highlighted antitrust problems with its hostile bid for rival Rio Tinto that would create the world's largest iron ore miner.

Optus's efforts to get a toehold in the iPhone market have put a $44 million dent in its profits.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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