Today's Business Headlines

01/05/2009 - 06:48

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Banks ordered to pay $1.6bn in compensation; Macquarie set to raise $1.2bn; Alumina to tap investors for $1bn to ease debt risk; Turnbull sees red on Rudd China policy; Swan reveals $50bn budget revenue hit

Today's Business Headlines

Banks ordered to pay $1.6bn in compensation
The WA government is set to reap the lion's share of the biggest compensation payout in Australian legal history after the banks that snatched millions from Alan Bond's ailing Bell Group were ordered to hand over $1.6 billion to liquidators yesterday. The West

Macquarie set to raise $1.2bn
Macquarie Group was last night sounding out investors about a capital raising of up to $1.2 billion through an institutional and retail share placement ahead of one of the investment bank's worst ever full-year profit performances. The Australian

Alumina to tap investors for $1bn to ease debt risk
The grim outlook for the alumina and aluminium markets has prompted Alumina to return to shareholders for the second time in eight months seeking an equity injection, this time for as much as $1.02 billion. The West

Turnbull sees red on Rudd China policy
Malcolm Turnbull will take aim today at the Rudd Government's embrace of China by calling for the rejection of the bid by the state-owned Chinalco. Sydney Morning Herald

Swan reveals $50bn budget revenue hit
The federal budget is facing a $50 billion revenue shortfall next year as the recession slashes tax payments, feeding expectations that the government will reveal a deficit as large as $70 billion on May 12. The Fin Review

 

THE WEST AUSTRALIAN:

Page 1: The WA government is set to reap the lion's share of the biggest compensation payout in Australian legal history after the banks that snatched millions from Alan Bond's ailing Bell Group were ordered to hand over $1.6 billion to liquidators yesterday.

Page 4: Chevron's revised $50 billion plan for Australia's biggest resource project on Barrow Island has been given highly conditional approval by the Environmental Protection Authority, despite the watchdog's continued opposition to the Gorgon liquefied natural gas plant being built on the A-class reserve.

The Barnett government has jeopardised the Swan River's health by abandoning a plan to phase out highly soluble fertilisers in favour of a voluntary audit scheme run by the fertiliser industry, the Conservation Council and Greens have claimed.

Colin Barnett has joined the ranks of doubters about an emissions trading scheme, calling it a "poor second-best" to other measures to cut greenhouse gases.

Page 12: The federal government has abandoned its ambition to scrap the top tax rate and is weighing up whether to break some of its key election promises as it struggles with a near $100 billion deficit over the next two years.

Page 14: Federal opposition leader Malcolm Turnbull wants Treasurer Wayne Swan to prevent Chinese state-owned company Chinalco from taking a stake of up to 18 per cent in mining giant Rio Tinto.

Page 17: A charity that helps seriously ill and disabled children hopes to raise at least $1.6 million today through the Starlight Day fundraising drive.

Page 18: WA's 139 councils have overwhelmingly rejected amalgamation in favour of continuing to share resources, casting doubt on the success of the state government's reform agenda.

Page 19: The true extent of apprentices out of work because of the job crisis is likely to be twice as high as the official figures shows, according to the metal trades union.

Business: Commonwealth Bank has taken the axe to newly acquired BankWest's loan portfolio, booking $825 million of provisions to drive the former Bank of Western Australia to its first loss in more than a decade.

Two of Perth's most prominent listed engineering groups have returned to the hands of their founders, as the increasingly pressured contracting sector is hit by executive shake-ups.

Macquarie Group was last night engaged in a fundraising exercise to harvest as much as $1.2 billion from investors as speculation grew it was preparing to take write-downs on the value of two of its key satellite funds.

Australia's sharemarket surged 2.3 per cent yesterday to mirror gains on global bourses and shrug off news that the US economy was contracting at a rate of 6.1 per cent, much worse than expected.

The grim outlook for the alumina and aluminium markets has prompted Alumina to return to shareholders for the second time in eight months seeking an equity injection, this time for as much as $1.02 billion.

Wesfarmers won't be tied to a timetable on a potential roll-out of mini LNG plants on the east coast.

 

THE AUSTRALIAN FINANCIAL REVIEW:

Page 1: The federal budget is facing a $50 billion revenue shortfall next year as the recession slashes tax payments, feeding expectations that the government will reveal a deficit as large as $70 billion on May 12.

Macquarie Group will raise capital for the first time in two years, seeking to tap shareholders for more than $700 million to top its prudential buffers and eliminate speculation over whether it is adequately capitalised to weather the rest of the financial crisis.

Some of the country's leading companies are forcing the big law firms to stop billing based solely upon the number of hours lawyers work, as they demand enhanced value during the economic downturn.

Page 3: The federal coalition is to challenge Treasurer Wayne Swan to reject Rio Tinto's alliance with Chinese mining giant Chinalco on the grounds it fails the national interest.

Page 5: The nation's biggest planned resources project has overcome one of its final regulatory hurdles after Western Australia's environmental agency reluctantly approved Chevron's Gorgon gas plant on Barrow Island.

Twenty banks will pay $1.58 billion to the liquidator of Bell Group, once part of Alan Bond's empire, in the largest sum awarded by an Australian court.

 

THE AUSTRALIAN:

Page 1: The recession will throw a million people into unemployment, according to Treasury forecasts to be included in the federal budget in two weeks.

A group of 20 banks headed by Westpac has been ordered by a Perth judge to pay $1.58 billion to the liquidators of the Bell Group, which collapsed in 1991, as compensation for their having grabbed security over a number of Bell assets in 1990 as the group was nearing collapse.

A campaign to have Richard Pratt's Order of Australia posthumously restored received influential backing yesterday as political leaders, business giants and leading figures in sport and the arts gathered at a Melbourne synagogue for the late tycoon's funeral.

Malcolm Turnbull says Chinalco's controversial bid for 18 per cent of Rio Tinto should be rejected by Treasurer Wayne Swan because it is not in the national interest.

Page 2: US auto giant Chrysler will file for bankruptcy so it can be restructured as a more viable business.

The states would scrap all stamp duties in exchange for a $20 billion a year share of income tax revenue under a radical revamp of fiscal relations put to the Rudd government's tax review.

Page 4: Jobless teenagers will be denied the dole unless they agree to undertake training under a government push to prevent the creation of a new generation of long-term unemployed.

Australia's electricity generators have warned the Rudd government that power stations could face insolvency this year under an emissions trading scheme that forced such rapid change it risked "blowing up in their faces".

The housing market kept its head above water in the March quarter, as Australia was sinking into recession.

Health fund HBF and hospital operator Catholic Health Australia have launched last-ditch campaigns against feared budget cuts to the private health insurance rebate, warning cuts will drive out fund members and overload public hospitals.

Page 5: Australia's biggest resources project - Chevron's expanded $50 billion Gorgon LNG development - could get under way this year, creating thousands of jobs, after gaining reluctant approval from Western Australia's environmental watchdog.

BHP Billiton plans to store radioactive mine tailings from its proposed Olympic Dam expansion on the surface, rather than return the material to the pit as the Northern Territory's Ranger uranium mine is required to do, a key environmental group says.

It's always startling to see banks getting hit with a bill for $1.58 billion from a court case even if, as they pointed out loudly yesterday, they'll end up getting a lot of that back.

Page 7: Kevin Rudd faces a revolt among the states and territories over alleged special treatment for Tasmania in the roll-out of the new super-fast broadband network.

Business: Macquarie Group was last night sounding out investors about a capital raising of up to $1.2 billion through an institutional and retail share placement ahead of one of the investment bank's worst ever full-year profit performances.

The Australian banks snapped a three-day losing streak yesterday, bouncing back into favour after the savage sell-off prompted by the weaker results from ANZ and NAB.

Commonwealth Bank will claim almost $400 million back from the Halifax Bank of Scotland after the Australian bank was forced to increase the bad debt provisions 10 times for recent purchase BankWest.

Alumina, partner in the world's largest supplier of the product to the aluminium industry, plans to raise up to $1.02 billion at a heavy discount to refinance debt.

Westfield Group's Australian shopping centres are defying the worst of the downturn, delivering a 1.5 per cent increase in March-quarter sales to $20.9 billion, helped along by the federal government's stimulus packages.

Chevron's $50 billion Gorgon gas project - Australia's biggest resource development - has won conditional environmental approval for a 50 per cent expansion.

Gloucester Coal's largest shareholder plans to continue its fight to stop the miner's merger with Whitehaven Coal and to pursue its own bid for the company.

Profit plunged 44 per cent in the first half for BT Investment Management, which has reduced its dividend, after the global financial crisis wiped out a large part of the value of its funds under management.

Health and beauty firm Australian Pharmaceutical Industries has lifted interim net profit by 8.7 per cent to $6.7 million despite a difficult retail climate.

Financial planners have lost 215,000 clients in the past year, according to a survey that paints a bleak picture for the beleaguered industry.

The sole sizeable survivor of the dotcom frenzy for online business procurement exchanges, China-based Alibaba.com, is preparing to introduce premium services in Australia, where it already has 200,000 customers.

The telecoms sector continued to defy the financial crisis when Macquarie Telecom yesterday adjusted its guidance for the financial year, boosting expected earnings by 70 per cent.

Chrysler would file for Chapter 11 bankruptcy today to reorganise into a more viable carmaker, an Obama administration official said late last night, Australian time.

China's efforts to quickly pump up its economy are providing a much-needed boost for US businesses as well.

 

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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