Air New Zealand Limited (AIZ):
Air New Zealand has been ordered to pay $15 million in penalties by a Federal Court, after the competition watchdog took legal action against a number of airlines in relation to cartel behaviour. It comes after the High Court dismissed an appeal by the airline in June, against an earlier ruling it had breached competition law in relation to price fixing. “These illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia,” ACCC Commissioner Sarah Court said. The Court found that Air New Zealand made and gave effect to agreements with other airlines to fix the price of fuel and insurance surcharges on air freight services between 2002 and 2007. The court today ruled that Air New Zealand a penalty of $11.5m for the price fixing of fuel surcharges imposed for cargo from Hong Kong to Australia, as well as $3.5m for price fixing in relation to the insurance and security surcharge from Singapore to Australia. Air NZ has also agreed to pay $2 million towards the ACCC’s legal costs. “This decision sends a strong warning to overseas and domestic operators that the ACCC can and will continue to defend competition and the rights of Australian customers and businesses by taking action against anti-competitive conduct,” Ms Court said.
APA Group (APA):
Hong Kong’s CK Infrastructure has pledged to form a new Australian pipeline development business as part of plans to divest some Western Australian APA Group gas pipeline assets as a new company, as CKI tries to get its $13 billion APA bid past the competition watchdog. The pledge was revealed today by the Australian Competition and Consumer Commission, which has called for submissions on the bid from the CKI-led consortium. If successful, the bid would create a pipeline giant owning the major gas pipelines on both sides of the country, along with gas storage facilities, gas distribution assets and power generation, transmission and distribution facilities. In the call for submissions, the ACCC released details of a CKI pledge to sell some of APA’s WA assets as a stand-alone asset that could compete with CKI’s existing assets. These included the new detail that the plans included “a new pipeline development business in Australia”. The CKI bid is priced at a knockout level of $11 per stapled security and has been enough to win due diligence. But APA stock (APA) has remained well below this, trading at $9.92 at 12:37pm (AEST), because of concerns the bid will not clear regulators.
APN Outdoor Group Ltd (APO):
The competition watchdog has launched an inquiry into France-based JCDecaux’s $1.2 billion takeover of APN Outdoor, which combines the No 2 and 5 players in outdoor media. Last year the Australian Competition and Consumer Commission blocked APN’s bid to buy oOh! Media. The market got more concentrated this week when oOH! Media acquired Adshel for $570 million, which would give the company a 40 per cent share of the market. JCDecaux controls 35 per cent with APN under its control. The French outdoor advertiser capped off the latest round of consolidation in outdoor advertising yesterday by lifting its takeover offer for APN Outdoor to $1.2bn. JCDecaux’s $6.70 a share cash offer yesterday was recommended by APN’s board and came after three days of intense negotiations.
Australia and New Zealand Banking Group (ANZ):
ANZ rushed into its $2.4 billion takeover of rural financier Landmark with little due diligence as the bank attempted to become the biggest player in the nation’s agribusiness market. However, the acquisition in the aftermath of the global financial crisis soon wrong-footed the bank with an explosion of souring loans, the financial services royal commission heard yesterday. In a lengthy and protracted hearing, royal commissioner Kenneth Hayne was visibly frustrated by the testimony provided by ANZ head of commercial lending services Ben Steinberg, who was unable to provide responses or simple answers to numerous lines of questioning at the Brisbane Magistrates Court. ANZ’s Mr Steinberg was unable to say whether the bank conducted stress tests of the loans on the books of its Landmark acquisition in 2009. About a third of the loans later became impaired or were considered high-risk of default soon after ANZ bought the division from the then listed wheat exporter AWB. By 2013, $722 million worth of Landmark loans were impaired or considered high risk — a total of 1050 loans — and the bank ended up forcing 162 farmers off their land. ANZ’s Mr Steinberg said loan quality data for the 2011 and 2012 years was “not available” to the bank.
Commonwealth Bank of Australia (CBA):
The prospect of a Commonwealth Bank share buyback has receded after its announcement of a wealth management demerger worth up to $10 billion, according to analysts. While CBA’s capital position was healthy, Macquarie said in a note that the bank’s capital base would have to absorb the cost of the spin-off. Further, capital injections could also be needed to support the businesses in the medium term. “We see less scope for near-term capital management initiatives after this announcement,” Macquarie said. Rival broker CLSA agreed, saying the demerger would not lead to a capital release, reducing the likelihood of a share buyback. On Monday CBA announced a proposal to create a separately listed CFS Group, incorporating the superannuation and retirement solutions platform Colonial First State with $135bn in funds under management, and the global asset manager CFSGAM with $207bn in assets.
Funtastic Limited (FUN):
The collapse and liquidation last week of failed toy retailer Toys R Us has already claimed another victim, with ASX-listed toy wholesaler Funtastic forced to downgrade its full-year earnings guidance by as much as $1 million. For Funtastic (FUN), Toys R Us’s closure means the demise of its fourth largest retail trading partner. It’s yet another blow for Funtastic, which for years has been struggling with bloated losses, write downs and dwindling sales. But just as the business has been looking to be pick itself up off the floor, it warned today profits would be hurt by the lurch into administration of Toys R Us following the collapse of its US parent. “Toys R Us is the company’s fourth largest retail trading partner and their closure will have a negative impact on the expected earnings for fiscal 2018,’’ Funtastic said. Funtastic predicts earnings will be hit by between $500,000 and $1m this year.
Woodside Petroleum Limited (WPL):
Australia’s biggest independent oil and natural gas company, Woodside Petroleum, could exit a US liquefied natural gas export terminal. Chief executive Peter Coleman says the company (WPL) will decide soon whether it will continue to invest in Sempra Energy’s Port Arthur liquefied natural gas (LNG) export terminal in Texas. Speaking at the World Gas Conference in Washington, DC, Mr Coleman said the project’s ability to provide Woodside with an adequate return was “very challenged”. “We’ve got to make some decisions pretty soon about our continued pursuit (of Port Arthur) with Sempra,” said Mr Coleman, noting that Woodside has been paying part of the cost to develop the project. “We don’t have an investment in (Port Arthur). What we’ve been doing is just paying our way, and whether that is going to give us an adequate return, I would say today that is very challenged,” Mr Coleman said.
(Source: AIMS)
Air New Zealand has been ordered to pay $15 million in penalties by a Federal Court, after the competition watchdog took legal action against a number of airlines in relation to cartel behaviour. It comes after the High Court dismissed an appeal by the airline in June, against an earlier ruling it had breached competition law in relation to price fixing. “These illegal price fixing agreements unfairly reduced competition for the transport cost for goods flown into Australia,” ACCC Commissioner Sarah Court said. The Court found that Air New Zealand made and gave effect to agreements with other airlines to fix the price of fuel and insurance surcharges on air freight services between 2002 and 2007. The court today ruled that Air New Zealand a penalty of $11.5m for the price fixing of fuel surcharges imposed for cargo from Hong Kong to Australia, as well as $3.5m for price fixing in relation to the insurance and security surcharge from Singapore to Australia. Air NZ has also agreed to pay $2 million towards the ACCC’s legal costs. “This decision sends a strong warning to overseas and domestic operators that the ACCC can and will continue to defend competition and the rights of Australian customers and businesses by taking action against anti-competitive conduct,” Ms Court said.
APA Group (APA):
Hong Kong’s CK Infrastructure has pledged to form a new Australian pipeline development business as part of plans to divest some Western Australian APA Group gas pipeline assets as a new company, as CKI tries to get its $13 billion APA bid past the competition watchdog. The pledge was revealed today by the Australian Competition and Consumer Commission, which has called for submissions on the bid from the CKI-led consortium. If successful, the bid would create a pipeline giant owning the major gas pipelines on both sides of the country, along with gas storage facilities, gas distribution assets and power generation, transmission and distribution facilities. In the call for submissions, the ACCC released details of a CKI pledge to sell some of APA’s WA assets as a stand-alone asset that could compete with CKI’s existing assets. These included the new detail that the plans included “a new pipeline development business in Australia”. The CKI bid is priced at a knockout level of $11 per stapled security and has been enough to win due diligence. But APA stock (APA) has remained well below this, trading at $9.92 at 12:37pm (AEST), because of concerns the bid will not clear regulators.
APN Outdoor Group Ltd (APO):
The competition watchdog has launched an inquiry into France-based JCDecaux’s $1.2 billion takeover of APN Outdoor, which combines the No 2 and 5 players in outdoor media. Last year the Australian Competition and Consumer Commission blocked APN’s bid to buy oOh! Media. The market got more concentrated this week when oOH! Media acquired Adshel for $570 million, which would give the company a 40 per cent share of the market. JCDecaux controls 35 per cent with APN under its control. The French outdoor advertiser capped off the latest round of consolidation in outdoor advertising yesterday by lifting its takeover offer for APN Outdoor to $1.2bn. JCDecaux’s $6.70 a share cash offer yesterday was recommended by APN’s board and came after three days of intense negotiations.
Australia and New Zealand Banking Group (ANZ):
ANZ rushed into its $2.4 billion takeover of rural financier Landmark with little due diligence as the bank attempted to become the biggest player in the nation’s agribusiness market. However, the acquisition in the aftermath of the global financial crisis soon wrong-footed the bank with an explosion of souring loans, the financial services royal commission heard yesterday. In a lengthy and protracted hearing, royal commissioner Kenneth Hayne was visibly frustrated by the testimony provided by ANZ head of commercial lending services Ben Steinberg, who was unable to provide responses or simple answers to numerous lines of questioning at the Brisbane Magistrates Court. ANZ’s Mr Steinberg was unable to say whether the bank conducted stress tests of the loans on the books of its Landmark acquisition in 2009. About a third of the loans later became impaired or were considered high-risk of default soon after ANZ bought the division from the then listed wheat exporter AWB. By 2013, $722 million worth of Landmark loans were impaired or considered high risk — a total of 1050 loans — and the bank ended up forcing 162 farmers off their land. ANZ’s Mr Steinberg said loan quality data for the 2011 and 2012 years was “not available” to the bank.
Commonwealth Bank of Australia (CBA):
The prospect of a Commonwealth Bank share buyback has receded after its announcement of a wealth management demerger worth up to $10 billion, according to analysts. While CBA’s capital position was healthy, Macquarie said in a note that the bank’s capital base would have to absorb the cost of the spin-off. Further, capital injections could also be needed to support the businesses in the medium term. “We see less scope for near-term capital management initiatives after this announcement,” Macquarie said. Rival broker CLSA agreed, saying the demerger would not lead to a capital release, reducing the likelihood of a share buyback. On Monday CBA announced a proposal to create a separately listed CFS Group, incorporating the superannuation and retirement solutions platform Colonial First State with $135bn in funds under management, and the global asset manager CFSGAM with $207bn in assets.
Funtastic Limited (FUN):
The collapse and liquidation last week of failed toy retailer Toys R Us has already claimed another victim, with ASX-listed toy wholesaler Funtastic forced to downgrade its full-year earnings guidance by as much as $1 million. For Funtastic (FUN), Toys R Us’s closure means the demise of its fourth largest retail trading partner. It’s yet another blow for Funtastic, which for years has been struggling with bloated losses, write downs and dwindling sales. But just as the business has been looking to be pick itself up off the floor, it warned today profits would be hurt by the lurch into administration of Toys R Us following the collapse of its US parent. “Toys R Us is the company’s fourth largest retail trading partner and their closure will have a negative impact on the expected earnings for fiscal 2018,’’ Funtastic said. Funtastic predicts earnings will be hit by between $500,000 and $1m this year.
Woodside Petroleum Limited (WPL):
Australia’s biggest independent oil and natural gas company, Woodside Petroleum, could exit a US liquefied natural gas export terminal. Chief executive Peter Coleman says the company (WPL) will decide soon whether it will continue to invest in Sempra Energy’s Port Arthur liquefied natural gas (LNG) export terminal in Texas. Speaking at the World Gas Conference in Washington, DC, Mr Coleman said the project’s ability to provide Woodside with an adequate return was “very challenged”. “We’ve got to make some decisions pretty soon about our continued pursuit (of Port Arthur) with Sempra,” said Mr Coleman, noting that Woodside has been paying part of the cost to develop the project. “We don’t have an investment in (Port Arthur). What we’ve been doing is just paying our way, and whether that is going to give us an adequate return, I would say today that is very challenged,” Mr Coleman said.
(Source: AIMS)
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