Archive | Archive – world business

Snapshot on world business, week to 8 September 2002

5 September 2002

“Chainsaw” Al Dunlap, former chief executive of Sunbeam Corp, now 65, has agreed to pay a $US500,000 fine and agreed never to serve as an officer or director of a public company again. He also paid $US15 million to settle a shareholder claim, but neither admitted nor denied Securities & Exchange Commission charges that he engineered an accounting fraud to inflate Sunbeam’s profits after it hired him in 1996 to turn the company round. Sunbeam reported that turnaround in 1997, but later restated its results and filed for bankruptcy. The SEC said Mr Dunlap & Sunbeam’s chief financial officer used various techniques to overstate 1996 losses that could be blamed on past management, and overstate 1997/98 profits.

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Snapshot on world business, week to 15 April 2001

Latest: DBS Bank buys Dao Heng, banana war over, Harvey Norman offer for Rebel Sports.

15 April 2001

Singapore Government-controlled DBS Bank has become the fourth largest bank in Hong Kong after merging its Kwong On Bank with Dao Heng, controlled by Hong Leong Malaysia through 71%-owned Guoco Group. Guoco will retain a 20% share by a DBS offer of cash and shares in a DBS holding company.

13 April 2001

The US and European Union have ended the nine-year banana tariff war. Wow? The significance is in the change for international trade brought by the Bush Administration, which moved from the previous US stance of demanding an end to all quotas and has agreed to lift punitive retaliatory tariffs from 1 July. The European Union has agreed to a transition of modified quotas and tariffs until 2006, when all banana quotas are to be lifted. Next up: the battle over US subsidies to major exporters, which have also brought European retaliation.

9 April 2001

Harvey Norman Holdings and Rebel Sports have agreed a deal for Harvey Norman to buy the whole of Rebel at 83c/share.

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Snapshot on world business, week to 18 November 2001

18 November 2001

Guangzhou wants to put together five infrastructure projects costing 50 billion yuan to make it southern China’s main communications hub and put it more strongly in competition with Hong Kong. It’s already announced plans for a deepwater port at Nansha, will have a new international airport at Baiyun for 25 million passengers in 2003, and also plans two new underground train lines and a light rail project.

You probably heard the squeals from all over Australia by unionists proclaiming Qantas an anti-Australian airline as it announced job cuts of 1500-2000 on Thursday. Our prime minister probably knows how the chants go after her Melbourne experience over the Ansett chop.

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Snapshot on world business, week to 29 February 2004

23 February 2004

CB Richard Ellis Group Inc, which went private in 2001, wants to float $US150 million of stock. Its 1st task will be to pay off debt, including the $US38.3 million of 16% 2011 senior notes. The CB side of the business was floated in 1996 and merged with Richard Ellis in 1998. It was called CBRE Holdings Inc until 5 December, and CB Richard Ellis Services Inc until 17 February. The company described itself under “risk factors” in the SEC filing as a highly leveraged company, adding that this “could increase our vulnerability to general economic downturns and adverse competitive & industry conditions, placing us at a disadvantage compared to those of our competitors that are less leveraged.” It increased 4th quarter revenue 65% to $US621.3 million, but went from a $US15.1 million profit in 2002 to a $US10.1 million loss, mostly because of $US28.9 million of amortisation expense plus $US27.2 million of integration charges resulting from its takeover of Insignia Financial Group Inc. Revenue for the year rose 39.3% to $US1.6 billion, ebitda rose 8% to $US63.4 million despite the integration costs, but with $US60.4 million of amortisation charges & $US50.4 million of integration charges for the 12 months CBRE went from a $US18.7 million profit to a $US34.7 million loss.

I took this piece off the end of a Motley Fool radio show interview with Overstock.com chief executive Patrick Byrne. The link to the whole interview is at the end of this item. Mr Byrne: “I decided when I was sick, when I had cancer… of course I didn’t know if I was going to get better or not, and then there were brief periods when I was out of the hospital and I started thinking, ‘If I am just going to assume I am around for about 3 to 6 months more, what would I do if I knew today, if God whispered in my ear, “You are going to be around 6 months.”‘ Then I started living my life that way and it was kind of hard to break the habit. I realised about 10 years later that not only was I still viewing my life that way, but it is probably a good thing. Because if every day you wake up saying, ‘If I only had 6 months left to live, what would I do today?’ someday you are going to be right. In the meantime, you are not going to spend a bunch of time watching TV.”
Website: The Motley Fool.com: Why can’t a ceo tell the truth?

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Snapshot on world business, week to 16 December 2001

10 December 2001

Ariadne Australia Ltd and Graham Mulligan (freshly resigned as chief executive of the Port of Brisbane Corp, previously of NZ Oil & Gas Ltd, Ports of Wellington and Container Terminals Ltd) have formed a joint venture, International Infrastructure Management Pty Ltd, to invest in international transport infrastructure such as ports & related facilities.

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Snapshot on world business, week to 15 July 2001

Latest: Long bonds to overcome Thai bank debt mountain, New World Infrastructure sells down, Wesfarmers gets H Smith board’s takeover approval, Woolworths Australia boosts sales.

14 July 2001

The Thai Government wants to issue bonds with maturity of up to 40 years at current low interest rates to meet the 1.2 trillion baht ($NZ65 billion) liability of its Financial Institutions Development Fund, which absorbed Thai bank and finance company losses after the 1997 Asian financial crisis.

New World Infrastructure, controlled by New World Developments Ltd of Hong Kong, has sold Investments in a mainland city public utility company, two toll road projects and a Beijing power generator for $HK1.5 billion — one at a profit and two at a loss — to help meet $HK7.5 billion of convertible and syndicated loans due in the next 18 months.

Wesfarmers Ltd of Perth increased its offer for Howard Smith Ltd on Wednesday to $A13.25 cash plus a 2-for-5 scrip offer, which won the support of Howard Smith’s directors. The new offer will close on 7 August. Among Howard Smith’s businesses are the (B>Benchmark and Hardwarehouse chains of stores.

11 July 2001

Woolworths Ltd of Australia increased sales 10.1% in the 52 weeks to 24 June, but says sales growth accelerated to 11.2% for the second half and 11.4% for the final quarter. Sales for the quarter were $A4.826 billion, for the half $A9.668 billion, and for the full year $A20.915 billion. Continuing operations grew 12.2% for the quarter and 11% for the year.

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Snapshot on world business, week to 12 January 2003

10 January 2003

Bradford-based William Morrison Supermarkets plc, Britain’s 5th-largest supermarket chain, has offered £4.2 billion for the 4th largest, Safeway plc, including £1.3 billion of debt. The share offer will give Safeway shareholders 47% of Morrison and create a group with 600 stores, 16% market share & £12.6 billion annual sales. The offer price of 277.5p/share is 30% above Safeway’s Wednesday close. Takeover completion is expected to take until June. Tesco plc has 26% market share, J Sainsbury plc holds 2nd place but Asda, now owned by Wal-mart Stores Inc of the US, is close to pushing Sainsbury’s back to 3rd.

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Snapshot on world business, week to 24 November 2002

23 November 2002

Insurance Australia Group (IAG), owner of State Insurance in New Zealand, got a lukewarm response from small investors to its quest for $A380 million in equity to buy CGI (Commercial General) and NZI, achieving only a 24.5% ($A93 million) retail takeup. NRMA Insurance Ltd, the IAG subsidiary which bought State, launched 2 redeemable 5-year subordinated notes issues totalling $A300 million this week, to refinance a bridging facility for the purchase of CGI and NZI from Aviva plc. 1st part of the $A1.8.55 billion purchase programme was an $A500 million institutional placement. IAG plans an $A160 million dividend reinvestment plan for early 2003 as another part of the funding package.

John Dillon, chairman of the US Business Roundtable & chief executive of Carter Holt Harvey’s controlling shareholder, International Paper, said a majority of chief executives in a recent Roundtable survey had grave concerns about their ability to create jobs & contribute to economic growth in the present fragile economic environment. An American Express survey of middle market chief financial officers had 2-3rds of them believing the US economy would stay flat, act erratically or decline further on 2003.

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Snapshot on world business, week to 3 August 2003

AMP Ltd has agreed to sell its remaining Australian property finance loan portfolio, comprising $A232 million of construction & property investment loans, to Suncorp-Metway. This is the last major portfolio sale in AMP’s banking & finance asset divestment programme announced last November. The New Zealand residential mortgage & retail deposit portfolios went to HSBC and most of the property finance portfolio to GE Commercial Finance in April, and the New Zealand rural loan portfolio to Rabobank in May.

30 July 2003

Want to know where all those millions of dollars’ worth of Nigerian frauds start out? Through a tangle of phone lines like this in Lagos, according to a US State Department pamphlet about the scams – how they work, themes & variations. Oh, and where the delete button is on your computer.
US State Department pamphlet on Nigerian frauds

ASIC (the Australian Securities & Investments Commission) ran the Nigerian scam report in its latest Fido newsletter (on financial tips & safety checks), as the last item in a list of 8 scams entered so far for ASIC’s 2003 Pie in the Sky awards. The other entries listed were: Hot stocks, Make money out of heating oil options, Turn $100 into $137,000+ in 12 months (I like the ones where you turn a tiny sum into an unusual but precise huge sum, such as $137,522.86 in 5½ weeks), an Australian angle on Nigerian letters, Fake banking & payment websites, Stockmarket games and Banking scam.
Pie in the Sky award entries

The Fido newsletter also warns that internet scammers are getting more sophisticated in tricking them into giving them account names & password, examines related-part documents and directors’ conflicts of interest, looks at painful lessons from get-rich-quick seminars and runs a document on defective prospectuses.

Zacks Investment Research added a few stocks to its “good buy” list and a big bunch to its “goodbye” list this week. Real estate sector company Anworth Mortgage construction sector companies Meritage Corp and Pulte Homes made it into the buy list. Among those hitting the sell list were the Boeing Co, Coca Cola Bottling, International Paper and, in the real estate sector, Central Parking, Cousin Properties, Host Marriott and Ramco-Gershenson Properties Trust.

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