APA Group (APA):
APA Group chief Mick McCormack says Malcolm Turnbull’s ousting is expected to delay a government decision on Hong Kong-owned CK Infrastructure’s $13 billion takeover of his gas pipeline company, with the Coalition not wanting to give Labor a target before the Wentworth byelection and the federal election. Speaking from Singapore yesterday, the APA boss said the change of prime minister had raised the political stakes around Foreign Investment Review Board approval of the deal, which would create a Hong Kong-owned pipeline giant with assets on both sides of the country. The bid was cleared by the Australian Competition & Consumer Commission earlier this month but is still waiting on the go-ahead from new Treasurer Josh Frydenberg after he gets a re-com-mendation from the FIRB. Mr McCormack said that when APA approved the $11-a-share takeover bid on August 13, the board thought the deal would probably get government approval.
Beach Energy Ltd (BPT):
Aussie oil-and-gas producer Beach Energy said Thursday it aims to roughly double annual production over the next five years to as much as 40 million barrels even as it slashes debt. By 2023, Beach said it expected output to hit between 34 million and 40 million barrels of oil equivalent a year, a jump from 19m barrels in the year through June and a forecast rise to 26m-28m in the current financial year. The target comes after Beach in August said it planned its biggest-ever investment year in the wake of the acquisition of a suite of oil and gas assets in Australia. Beach in July sharply increased its estimate of reserves and resources following a review of the portfolio of conventional oil and gas assets it bought from Origin Energy in a $1.5 billion deal that was completed at the end of January. The acquisition increased Beach’s exposure to Australia’s tight east-coast gas market and widened its geographic footprint.
Flight Centre Travel Group Ltd (FLT):
Travel giant Flight Centre is expanding into hotel management, hotel leasing and ownership to help satisfy the 11 million hotel room nights it buys locally and internationally each year. The former high-ranking Peppers and Mantra executive said the first step was to manage -hotels, with Flight Centre recently buying small Bangkok-based hotel management com-pany BHMA, which has 20 hotels under management in Thailand, Vietnam and the Indonesian island of Bali. The acquisition, concluded in August last year, has given the BHMA control over several brands including the 4-4.5-star Away Resorts & Villas. Flight Centre global hotel network general manager Kent Davidson said the next step up from hotel management would be hotel leasing. He said he had looked at leasing hotels in Sydney for example because the city experienced heavy demand for rooms at certain times. Flight Centre had looked at opportunities in Sydney, where Mr Davidson said there was heavy enough demand for hotel rooms and constraints on amount of product available.
National Australia Bank Ltd (NAB):
National Australia Bank and its wealth management business MLC face a class action on behalf of customers sold “worthless” credit card insurance. Law firm Slater and Gordon’s class action, filed in the Federal Court, alleges that MLC and NAB engaged in “unconscionable conduct” by selling credit card insurance to holders who were ineligible to claim under its terms. The firm alleges that the conduct breached the Australian Securities and Investments Commission Act 2001. “In the case of the life cover, the policy was of minimal value to many customers. NAB admitted as much in the royal commission.” Slater and Gordon class actions principal lawyer Andrew Paull said. Both NAB and MLC were in much stronger bargaining positions than any of the people they were contacting and selling this insurance to. The class action also comes after Slater and Gordon launched “Get Your Super Back” campaign earlier this month targeting super funds it said had “gouged” the retirement savings of many Australians. Commonwealth Bank-owned Colonial First State and AMP were likely to be the first targets of planned class actions, Slater and Gordon said at the time.
Qantas Airways Ltd (QAN):
A new multi-million-dollar pilot training centre will be built in Toowoomba on Queensland's Darling Downs, as part of a plan by airline giant Qantas to keep up with growing global demand. The site at Toowoomba's Wellcamp Airport will be one of two centres to be built across Australia — with the second location yet to be announced. Earlier this year, Toowoomba and Mackay had been shortlisted among seven other regional locations, including Alice Springs, Bendigo, Busselton, Dubbo, Launceston, Tamworth and Wagga Wagga. The $35 million academy and accommodation facility will have an initial intake of 100 pilots when it opens its doors next year, with a capacity of up to 250 pilots a year. More than 18,000 people have so far registered their interest for enrolments online. Construction will begin next month at Wellcamp airport, and will be operational by mid-2019.
Telstra Corporation Ltd (TLS):
Telstra customers could face a lengthy wait before they see any 5G services, says Optus head of regulatory affairs Andrew Sheridan, who warned that the incumbent telco may struggle to get its hand on the necessary 5G spectrum as soon as the auctions are completed in November. “There is a gap between the rhetoric and reality in terms of Telstra’s position on 5G, simply because they don’t have enough spectrum,” Mr Sheridan told The Australian. “It has some spectrum in the capital cities but to offer a true 5G experience you need a lot more.” While the upcoming 5G spectrum auction will remedy the shortfall for Telstra, Mr Sheridan said the telco may have to wait until March 2020 in some cases to get its hands on the asset.
Xero Ltd (XRO):
Xero shares have dropped by as much as 4.2 per cent in early trade after the company announced the offering of US$330 million in convertible notes to fund potential acquisitions and repay debt. “It is intended that, after paying transaction costs, repaying certain existing term debt and funding the costs of the call option transactions (described below), the net proceeds will be used for potential acquisitions of, and investments into, strategic and complementary businesses and assets which are in line with Xero’s strategy to drive long-term shareholder value,” it said in a release to the market this morning. “There is no agreement or understanding with respect to any such acquisitions or investments at this time.” The company provided a trading update at the same time, forecasting cash outflows outside of M&A to reduce for the year ahead compared to the year previous. It reaffirmed consensus earnings estimates between $NZ$66m and NZ$94m - what is set to be updated following its acquisitions of Gustoc and Hubdoc earlier this year.
(Source: AIMS)
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