Press digest australian business news feb 8

← Homepage

Compiled for Reuters by Media Monitors. Reuters has not verified these stories and does not vouch for their accuracy. THE AUSTRALIAN FINANCIAL REVIEW (this site)--Observers expect one of the wealthiest men in Singapore, Richard Chandler, to make widespread changes to forestry group Gunns after being outed as a key backer of the company's latest capital raising. Mr Chandler will become the largest shareholder in Gunns, with sources believing he will own up to 40 percent of the company after the raising. Page 46.--Employees at supermarket chain Woolworths may be denied hundreds of millions of dollars in bonuses this year if the retailer fails to meet earnings growth goals under an incentive scheme. The company's earnings before interest and tax will need to rise by 3.7 percent before short-term cash bonuses can be awarded to staff. "The 3.7 percent is low by historical standards but there's doubt they'll achieve it this year," John Guadagnuolo from asset management group Aviva Investors said yesterday. Page 47.--The former head of Woolworths' food and liquor unit, Greg Foran, has been selected to lead the Chinese operations of United States retailer Walmart. Mr Foran resigned from the Australian supermarket chain last year after losing out to Grant O'Brien in a bid to become Woolworths chief executive. "China is a very important market for Walmart and I look forward to working with our 100,000 associates," Mr Foran said. Page 47.--Chris Lynch, the outgoing chief executive of Transurban , yesterday announced solid first-half earnings for the toll road developer while predicting more franked dividends. Transurban recorded a 7.5 percent increase in proportional earnings before interest, tax, depreciation and amortisation to A$390 million. However, the firm also revealed a 2 percent fall in free cash flow to A$184.2 million, dampening expectations that Transurban will be able to overcome its dividend guidance for 2012. Page 47. THE AUSTRALIAN (this site)--National Australia Bank chief executive Cameron Clyne yesterday announced that the bank's revenue had dropped by A$80 million due to increased volatility in global funding markets. Mr Clyne made the comments yesterday at the release of the lender's A$1.4 billion earnings result for the first-quarter. "We continue to operate in a very challenging, uncertain macro environment," the chief executive said. Page 35.

--Lindsay Fox, head of the Linfox logistics and transport empire, yesterday slammed supermarket giants Coles and Woolworths for "dictating" terms throughout the retail supply network. "They are expecting everything for nothing. They are going to crucify the farmers, crucify the bread manufacturers and if you spoke to most of the consumer goods manufactures at the moment, you would get a very mixed response about the aspects of dealing with these companies," he added. Page 35.--Commodities trader Glencore and global miner Xstrata yesterday confirmed their US$90 billion all-scrip merger, a deal that values Xstrata at US$62 billion. Mick Davis, chief executive of Xstrata and the proposed head of the new merged entity, yesterday said the agreement was a 21 percent premium for shareholders based on the miner's previous closing share price. "Increased scale will improve our risk profile, enhance access to capital markets and allow us to participate in industry consolidation," Mr Davis said. Page 35.--Macquarie Group yesterday announced it was cutting 1000 jobs, along with a stark 25 percent downgrade to the investment bank's full-year profit. The news shocked investors, who sent Macquarie stock down 5 percent at one stage, although the firm's shares rebounded late in the day to close 0.7 percent lower at A$25.90. "Europe has had a big impact on our market over the last 12 months and certainly over the past quarter  we don't know whether 2011 is the bottom," Nicholas Moore, chief executive of Macquarie, said. Page 35. THE SYDNEY MORNING HERALD (this site)

--National Australia Bank (NAB) yesterday announced a review into its British division, including its Yorkshire Bank and Clydesdale Bank branches, a move that could result in the lender making a multibillion-dollar sale to exit the region. "We felt the economy was bottoming last year and now that's clearly not the case  it's likely the [United Kingdom] will be in a prolonged recession," Cameron Clyne, chief executive of NAB, said. Page B1.--Visy has launched an inquiry into an alleged "widespread" fraud in its payroll office, with the packaging group accusing a worker of stealing more than A$3.31 million. Visy acquired court orders last week preventing Loretta Delianov, one of the firm's payroll managers, from using her bank accounts or dealing with three properties in Victoria. According to an affidavit from David Latta, head of risk management at Visy, Ms Delianov signed a document admitting to stealing A$991,769 since 2006, but he questioned her honesty. Page B3.--Julie and Emmanuel Cassimatis, founders of Storm Financial, yesterday said the Australian Securities and Investments Commission (ASIC) had conducted audits and reviews of the collapsed financial planning firm "on numerous occasions from 1993 to 2008" without complaint. The corporate regulator began civil penalty proceedings against the pair last year in Federal Court, claiming the founders had violated their duties as directors. ASIC is seeking to have Mr and Mrs Cassimatis banned from company directorship. Page B3.

--An investigation into the United States parent of futures trader and contracts for difference provider MF Global found the company misused clients' funds five days before filing for bankruptcy last year. Chris Campbell, partner at professional services group Deloitte, was appointed administrator of MF Global's Australian division, which held a A$319 million trading book for approximately 13,000 customers, a day after the parent company folded. Page B4. THE AGE (this site)--Local brewer Foster's Group yesterday lost the right to import beers from Japanese rival Asahi, with the latter looking to establish a foothold of its own in the Australian market. Asahi Group Tokyo will begin importing and marketing its Asahi Super Dry through its Australian business, Independent Distillers, from April 2. Foster's has responded by increasing local promotions of its international beers. Page B3.--Shares in Cochlear jumped by 7.59 percent yesterday to finish at A$62.52, despite the bionic ear manufacturer announcing a A$20.4 million half-year loss after it was forced to spend A$100.5 million recalling its Nucleus CI500 series of implants. "While the A$20 million loss was disappointing, the recall costs have been quarantined and importantly, a record number of recipients received a cochlear implant in the first half," chief executive Chris Roberts said. Page B3.--St George Bank yesterday apologised for an "inadvertent" mistake that result in the email addresses of 500 customers of St George Margin Lending (SGML) services being revealed in a mass message sent by the bank. "When I rang they said they 'retracted' it. Which apparently means if you didn't open it, it is replaced by another email. I have opened it already hence I have the private emails of 500 SGML clients. No apology email either," one client said. Page B4.--Australian fund manager Industry Funds Management has been selected by the California State Teachers Retirement System (CalSTRS) to manage more than US$500 million worth of infrastructure investments. The appointment is one of the largest commitments in infrastructure handed out by a pension fund in the United States. Chris Ailman, chief investment officer of CalSTRS, said the investment would emulate the framework of Australian super funds which have "pioneered this sector". Page B4.