Business News

Directors of Herald Resources (HER)has finally given thumbs up to the joint venture offer from Indonesian mining company Pt. Antam and Chinese smelter Zhongjin. They shall sell their shares to the joint venture offer from the two companies. The Chinese and Indonesian consortium had offered $2.60 cash and $2.65 a share offer which valued Herald Resources at $524 million.

Royal Dutch Shell has become the third company to strike a deal for coal seam methane projects that are rapidly evolving in the Queensland area. It struck a $776 million deal with Arrow Energy (AOE) to improve setting up of multiple LNG plants in the region. It now holds 30 percent stake in Arrow’s CSM licenses in the state. The deal is yet to be examined by the Foreign Investment Review Board.

Australia’s Origin Energy Ltd. is the biggest producer of gas from coal seams. It rejected BG group’s offer last week for A$13.6 million or $13 million but stated that it still remains open for conversation for any fresh offers at the right price. It is also open to any fresh offers from any other interested bidders.

The subprime mortgage crisis has created a credit squeeze. The credit crisis has led to increased costs of debt and the lack of investor interest to refinance existing debts, which lead to the collapse of RAMS home loans and also the recent end for packaged mortgages (also called securitisation). Higher interest rates are expected as non-bank lenders cannot offer home loans as a result of the credit crisis. Since non-bank lenders are out of the picture, the lack of competition means higher interest rates.

ANZ confirmed that it has finally pulled out from the Gunns deal. It had been under pressure from the conservationist for not funding the $2 billion Tasmanian pulp mill project. ANZ did not give any reason for pulling out of the deal and the Tasmanian government also refuses to comment on ANZ’s refusal. However, the Deputy Leader of Opposition states this refusal as only a minor hiccup. The Federal Environment minister Peter Garrett states that financing such a project is entirely a matter for the Gunns and not the Federal government.

Qantas today lost its credit ratings by Standard and Poor's as it announced its drastic steps of cutting down jobs as well as its services. Qantas shall soon be limiting its flight services on less frequent routes.

According the Standard and Poor's, credit ratings for Qantas stood negative as it feared that the escalating fuel costs shall affect company’s earnings and also have its impact on the cash inflow.

Sinosteel claimed today that it has got a nod on the Midwest deal and it shall not have to get a re-endorsement from Foreign Investment Review Board on combined take over of Midwest-Murchison Metal group. It also distanced itself from last weeks comment from one of its senior executives regarding improvement of its $6.38 a-share bid.

Michael Hawker, Chief Executive officer of Insurance Australia Group (IAG), resigned today in wake of losing investors’ confidence. The company had rejected an A$8.7 billion takeover bid earlier this month by QBE Insurance Group. His resignation was effective immediately and was replaced by the Chief Operating Officer, Michael Wilkins, said the company statement. IAG chairman, James Strong, fully supported the appointment of Wilkins as immediate replacement to Hawker.

GE Money plans to put up mortgage lender Wizard Home Loans on sale. It has been attracting lot of criticism for accumulating debt and its insurance business practices. GE Money shall announce the sale on Wednesday at the New South Wales state franchisee meeting in Sydney.

James Hardie Industries reported net 20% fall in its earnings for its full year operations. It also foresees a further slump owing to weak US housing market. Its operating profits excluding asbestos payments and tax adjustments fell 61 percent to $20.1 million in three months to March 31 compared to same period last year. The company’s market value fell to A$2.4 billion after the shares tumbled 7.5%. It reported net results which showed a loss of US$71.6 million.