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​AUSTRALIA MARKET(2017-04-19)

Australia
2017-04-19 10:32

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Aurizon Holdings Ltd (AZJ): 
Cyclone Debbie has torn a $100 million hole in the full-year earnings of Queensland rail giant Aurizon, although it should recoup as much as 80 per cent of this in the future through regulated payments. Three of Aurizon’s four rail systems in central Queensland have reopened to coal trains, although they are operating under reduced capacity. The Goonyella coal rail system, which typically carries 52 per cent of Queensland’s coal to port, was worst hit by the rains that accompanied Debbie and remains shut. Aurizon said on Tuesday that it should re-open with capacity restrictions on April 26. The closures have seen Aurizon cut its forecast for coal haulage in the 2017 financial year from 200 million to 212 million tonnes, down to 190 million to 200 million tones.

Downer EDI Limited (DOW): 
Downer EDI says it would take at least three months for it to complete a fullscale review of the Spotless Group business should it win out with a $1.2 billion takeover offer which has undermined its own share price and caused retail holders to spurn a capital raising. The retail component of Downer’s equity raising has proved to be a disaster, with just $5.2 million in applications received for a $254 million raising to help fund chief executive Grant Fenn’s tilt at Spotless made on March 21 with a $1.15 per share cash offer. There was no incentive for retail shareholders to take up the two-for-five entitlement because the shares have been trading at such a steep discount to the offer price of $5.95, meaning those wanting to top up their holdings were better off buying on the market. Downer shares dropped 19¢ to $5.21 on Tuesday prior to the shortfall announcement, made after the sharemarket closed. The stock is trading 32 per cent below a 12-month high of $7.62 hit in March.

South32 (S32) & BlueScope Steel Limited (BSL): 
A push by Australian steel makers to secure long-term supply contracts for coking coal from the Metropolitan colliery in NSW’s Illawarra has contributed to the scuttling of South32’s $US200 million ($265 million) bid to acquire the project. South32 abandoned plans to acquire the coal project and its associated minority stake in the Port Kembla coal export terminal from US miner Peabody Energy yesterday. It comes just over a month after the Australian Competition and Consumer Commission said the deal would ‘‘significantly lessen’’ competition in the supply of coking coal to Australian steel makers, namely BlueScope Steel and Arrium’s Whyalla Steelworks in South Australia. 

Tabcorp Holdings Limited (TAH): 
Tabcorp has taken another step towards gaining the all-clear for its $11 billion merger with gambling giant Tatts, after hiving off its Odyssey Gaming Services business. It comes as the rival Pacific Consortium last night lobbed a fresh $7.3bn offer for Tatts. The consortium, which includes Macquarie Group and US private equity giant KKR, is known to be interested in Tatts’ lucrative lotteries business. Tabcorp’s divestment of Odyssey, a Queensland-based poker machine monitoring business the group bought last year as part of the $130m purchase of Intecq, forms part of the process for winning approval for the merger from the competition watchdog.

TPG Telecom Ltd (TPM): 
The value of TPG Telecom plunged close to $1 billion on Tuesday, the first trading day for the David Teohrun company since it announced a $1.9 billion play to enter the Australian mobile market. The telecommunications company led a sharemarket dive across the sector, extending falls that were sparked last week on the news that TPG had secured mobile spectrum and would become Australia’s fourth mobile network provider. TPG shares finished down 17.4 per cent at $5.50. The stock had been in a trading halt since Wednesday to undertake a $400 million rights issue to fund the spectrum purchase. The new shares were offered at $5.25, but TPG had presented a theoretical ex-rights price of $6.47, a guide to where the stock may have expected to trade, in presentations to investors last week. However, Ophir Assessment Management portfolio manager Andrew Mitchell praised TPG’s move to get into mobile. Shares in rival Telstra finished down 3.9 per cent to $4.00 and Vocus, which is not a mobile network operator, tumbled 3.4 per cent to $3.10.
(Source: AIMS)
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