Business News

Fortescue Metals Group (FMG), an Australian mining company has announced that, it is reviewing the legal status of their shipping contracts as a result of the disagreements developed from the decision of suspending two-third of its long-term shipping contracts.

Rio Tinto (RIO), the third largest mining company in the world has planned to reduce its net debt by $10 billion over 2009. The company has also planned to reduce the controllable operating costs by $2.5 billion within 2010. These plans aim at preserving value by maintaining cashflow and cutting the level of debt.

Australia’s third largest banking corporation, Westpac (WBC) has decided to raise its capital by A$2.5 billion through a share sale on Tuesday, to strengthen its balance sheet due to the acquisition of St George Bank (SGB), which does not have a sound lending books and raise in bad debt charges. This move follows a capital raising by National Australia Bank (NAB) last month.

Gerry Harvey has said that they are planning to close up to ten Harvey Norman stores in the next six months due to the economic slowdown. Harvey Norman (HVN) has 192 franchised stores in Australia and 28 stores in New Zealand, as well as outlets in Ireland, Singapore and Malaysia. The international retailer has revealed a decline in store sales up to 5% and margins have been cut by 10%. The retailer's pre-tax profit fell by 32% in the three months to September.

There is a takeover talk of Felix Resources (FLX) by Yanzhou Coal Mining Co. for about A$3 billion or US$ 1.9 billion. It is said that, executive of Yanzhou have visited Felix's Ashton coal mine in New South Wales this week to review its accounts. As a result of this, the share price of Felix Resources Ltd. has gone up by 44% on Friday.

James Packer's Crown has persuaded the banks that, it has the capability to repay the debts. It has managed to arrange a bilateral facility from 10 banks to repay the syndicated debt facility which is due on August 2010.The facility has arranged them at least 1.1 billion Australian dollars or 355 million US dollars approximately.

Australia's second largest beer manufacturer, Lion Nathan (LNN), reaffirmed its annual profits forecast on escalating sales of its beers including XXXX Gold and Tooheys Extra Dry. Chief Executive Officer, Rob Murray's efforts have finally started to pay off in three years. For past three years, he had posted little or no profits at all since past three years and pushed all money towards advertising, marketing and promotion of its brands.

Macquarie Group (MQG) announced a solid start for the current fiscal year; however, it cautioned that it would be difficult to repeat last year's performance owing to the ongoing credit crisis round the globe. The market gave a sigh of relief on firm's sound footings and the same reflected in its share prices as well.

Sydney based property investor group, Mirvac Group (MGR), announced that it expects to slash its dividends to its shareholders by 39 percent. Owing to the ongoing credit crunch in the global market, the company announced that the shareholders shall get a dividend of 20 cents a share in the fiscal year ending June 2009 as compared to last fiscal when they received 32.9 cents a share. It also announced that it expected a drop of nearly 24 percent in its earnings in its current earnings in the current year.

Australia's biggest retailer, Woolworths Ltd., met its full year profit forecast even as the country reels under rising fuel prices and escalating borrowing costs which slowed down the fourth quarter sales to just 7.5 percent. Earnings before interest and tax (EBIT) is expected to grow faster than sales as net profits seem to fall in the growth range of 21 percent to 25 percent. The retailing giant marked rise in total sales for 53 weeks ended June 29 to $47.035 billion or 10 percent higher. On normalised basis, that excludes extra trading week in the year, the sales were up by 8.7 percent.