Rio deal with Chinalco is dead; Troubled Mirvac launches $1.1bn capital raising; BHP tempts China with index-linked ore prices; Investors pull back as mining falls off; Brandrill warns of loss for second half
Rio deal with Chinalco is dead
The biggest deal in Australian corporate history, the $US19.5 billion ($24.4 billion) alliance between Rio Tinto and Chinese resources giant Chinalco, was last night heading for collapse, sparing the Rudd Government from one of its toughest foreign policy decisions. The Australian
Troubled Mirvac launches $1.1bn capital raising
Troubled property group Mirvac has drained the real estate sector of $1.1 billion as it moves to save its balance sheet, but has shocked investors with another round of asset write-downs and earnings downgrades. The Age
BHP tempts China with index-linked ore prices
BHP Billiton is trying to tempt China's steel sector with index-linked prices for iron ore, a ploy that could shatter a traditional annual pricing system that us already under strain. The West
Investors pull back as mining falls off
A major slump in private investment in the Northern Territory, Queensland and Western Australia, fuelled by a contraction in the mining sector, is likely to continue for the next three years and will reduce capacity for future growth, economists say. The Australian
Brandrill warns of loss for second half
Brandrill has joined the growing list of WA resources service companies hit by project deferrals because of the downturn, last night warning it would record a second-half loss. The West
THE WEST AUSTRALIAN:
Page 1: WA Senator Chris Evans us a frontrunner to become the next defence minister after Prime Minister Kevin Rudd forced the besieged Joel Fitzgibbon to quit yesterday.
Page 3: Mining giant Rio Tinto was last night rumoured to have scrapped its politically-charged $US19.5 billion ($24.1 billion) alliance with Chinese state-owned company Chinalco.
Page 6: The state government has failed to set aside money to pay a $52 million legal settlement over cost blowouts on the city tunnel section of the Mandurah railway line, adding another element to its budget black holes.
Page 13: Prime Minister Kevin Rudd's emissions trading scheme would cost 13,000 jobs in WA and knock hundreds of millions of dollars off the state's bottom line, according to a report.
Business: Mirvac Group has moved to take advantage of a rebound in its share price, announcing plans to tap investors for $1.1 billion to pay down debt and prop up its balance sheet after downgrading its earnings forecast and slashing the value of non-core assets.
BHP Billiton is trying to tempt China's steel sector with index-linked prices for iron ore, a ploy that could shatter a traditional annual pricing system that us already under strain.
Brandrill has joined the growing list of WA resources service companies hit by project deferrals because of the downturn, last night warning it would record a second-half loss.
A Toyota executive overseeing research says a battery breakthrough is needed for electric vehicles to become mainstream, and hybrids will remain the best "green" car choice for some time.
Analysts have urged Asciano to consider a capital raising to help pay off debt just as expressions of interest to buy all or part of the ports and rail group are due to be lodged today.
Regulators and shareholders should stop interfering in executive pay, according to the nation's chief banking body.
Cash-strapped Compass Hotel Group has sold its Gosnells Railway Markets site to an unidentified private investor in a deal which will help it pay down debt and gain breathing space from its bank.
THE AUSTRALIAN FINANCIAL REVIEW:
Page 1: Reserve Bank of Australia governor Glenn Stevens has raised concerns that very low interest rates could encourage borrowers to overextend themselves, after the jump in exports that helped keep the nation growing in the March quarter dramatically reversed in April.
Prime Minister Kevin Rudd has been forced into a cabinet reshuffle after Joel Fitzgibbon quit as defence minister for misleading the public over a series of lobbying meetings involving his brother and a US health fund.
Rio Tinto was last night preparing to launch a $US15 billion ($18 billion) rights issue and strike an iron ore joint venture deal with BHP Billiton that could spell the end for Rio's strategic partnership with Chinese aluminium giant Chinalco.
Page 3: The federal government will canvass raising the tax-free threshold on employee share schemes to more than $100,000 in draft law to be released today but business and unions warned that minor adjustments would not be enough to reactivate suspended schemes.
Page 5: The Australian Greens have raised the stakes in the Rudd government's battle to win Senate support for its carbon pollution reduction scheme with a proposal to increase emission reduction targets by ending logging in Australia.
Page 11: Consumers are turning their collective back on credit cards as they pay down plastic debt and retreat to the safer territory of debit-based forms of payment.
THE AUSTRALIAN:
Page 1: The biggest deal in Australian corporate history, the $US19.5 billion ($24.4 billion) alliance between Rio Tinto and Chinese resources giant Chinalco, was last night heading for collapse, sparing the Rudd government from one of its toughest foreign policy decisions.
Dumped defence minister Joel Fitzgibbon has threatened legal action against "a range of people and organisations" after lashing out at "Judases" who undermined him and contributed to his resignation yesterday.
The runaway success of the Rudd government's boost to the first-home owners scheme may be standing in the way of further interest rate cuts, with the Reserve Bank worried that people are being lured into loans they cannot afford.
Page 2: The Northern Territory Labor government has lost its majority in parliament after former deputy chief minister Marion Scrymgour quit the party yesterday, following a week of political tumult.
Page 3: The Swiss banking scandal that started with a mysterious factory fire in Sydney more than 15 years ago has moved one step closer to closure, with businessmen Trevor Kennedy settling a $6.9 million legal battle with the Australian Taxation Office.
The ABC will review its policy for approving comedy after staff failed to pick up an offensive Chaser sketch that should never have been broadcast, managing director Mark Scott said last night.
Page 4: Kevin Rudd is under pressure to stare down Labor's factions and appoint the most talented person to replace Joel Fitzgibbon as defence minister.
Joel Fitzgibbon's resignation as defence minister will test Kevin Rudd's relationship with the most powerful faction in the Labor Party: the NSW Right.
Mark Fitzgibbon might be head of one of the country's leading health insurers but no policy covers for the fallout over his involvement in the conflict-of-interest bungle that forced his brother to quit.
Page 5: Wayne Swan has admitted making representations to a special car financing fund administered by his own department on behalf of a car dealer who is a friend of Kevin Rudd, and who has for many years provided the Prime Minister with a ute that he uses as a mobile electorate office.
Page 7: State governments have released modelling showing they will be $2.2 billion a year worse off by 2012 under the federal government's emissions trading scheme, with NSW and Queensland's coffers to be hardest hit.
Two of the Big Four bank chief executives are pushing for the removal of the wholesale funding guarantee, after Commonwealth Bank boss Ralph Norris backed the call by his ANZ counterpart for a co-ordinated global approach.
A major slump in private investment in the Northern Territory, Queensland and Western Australia, fuelled by a contraction in the mining sector, is likely to continue for the next three years and will reduce capacity for future growth, economists say.
As the Australian dollar crashed through the US80c barrier this week, there was no rejoicing in the rock lobster industry, where the rise in the currency is costing exporters a small fortune.
Key members of the Queensland labour movement have convinced the Bligh government to hold further talks over its planned $15 billion asset sale, following their anger at being given only days to reconsider the ALP's anti-privatisation policy.
A union push to tighten industrial laws in the shipping trade -- including those governing foreign vessels manned by overseas crews -- has sent a shiver through the freight and resources industries.
Business: Investors are confident Rio Tinto will be able to raise at least $US10 billion ($12.5 billion) through a rights issue if the giant miner opts to abandon its groundbreaking alliance with Chinalco and solve its debt problems alone.
Commonwealth Bank chief executive Ralph Norris has hit back at the competition regulator's regrets over the BankWest takeover, saying it would have been "absolutely disastrous" for the domestic banking system if the West Australian bank had been allowed to fail.
The positive run of Australian financial markets was interrupted yesterday by a disappointing export performance and international economic jitters.
If, as is expected, the Royal Bank of Canada and the RFC investment and advisory group today present OZ Minerals with an 11 th-hour binding commitment to raise between $1.5 billion and $2 billion, the board and its advisers will have to urgently consider whether it is a superior proposal that warrants tearing up the agreement to sell all of the company's assets other than its Prominent Hill copper mine to the state-owned China Minmetals.
The future of OZ Minerals has been thrown into doubt, with the board today considering a last-minute alternative bid to trump its deal with China Minmetals.
Almost half of Australia's biggest corporations have joined their Asia counterparts in calling for banks to relax lending requirements and debt covenants amid pressure to refinance more often on tighter terms and higher margins.
Listed property group Mirvac yesterday announced plans to raise up to $1.1 billion to cut debt and fund its growth.
GPT Group yesterday sold another non-core asset, its Alliance portfolio, to a syndicate of private investors for $US72 million ($89.2 million), bringing total sales to $650 million this year.
Santos is close to signing the first offtake deal for its $8 billion Gladstone liquefied natural gas project as regional gas export customers try to lock in buyers.
A group of investors in Timbercorp's managed investment schemes is considering action to derail a planned wind-up of 24 olive and almond schemes, claiming the assets are worth more than administrator KordaMentha believes.
The competition watchdog has moved to address uncertainty over regulation of Telstra's copper network ahead of construction of Labor's $43 billion national broadband network.
One of the less explored issues of the global financial and credit crisis has been its devastating effect on early stage innovative companies, of which Australia has thousands.
Federal Reserve chairman Ben Bernanke has warned Congress and the White House that the US economy will suffer if they don't move soon to rein in the federal budget deficit, which he blamed for helping to push long-term interest rates higher.
United Airlines has asked Boeing and Airbus to propose duelling bids for up to 150 new airliners -- the latest example of major companies exploiting the recession to bargain-hunt.
The Chinese bidder for Hummer says it plans to give the gas-guzzling vehicles new life by promoting the brand around the world, including China, and by investing in clean-engine technologies.
The Australian share market yesterday closed 2 per cent lower, weighed down by profit-taking and a weaker resources sector on the back of softer oil and gold prices.
