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news) says its US$15.2 billion rights issue aimed at cutting debt has been well received in the United Kingdom (UK) and Australia. The uptake for the UK part of the issue was close to 98 percent, while the results of Australian section, which also appears to have been heavily supported, will be released tomorrow. The raising is expected to pay down almost US$15 billion (A$18.6 billion) of Rio's US$38 billion debt associated with its acquisition of aluminium producer Alcan (AL.TO - news) . Page 17.
- - - - Rising steel production in China has increased pressure on the China Iron and Steel Association (CISA) to settle a benchmark price for iron ore. Figures released yesterday show Chinese steel production averaged 1.52 million tonnes per day in June, the highest daily output so far this year. The CISA has demanded that miners cut iron ore prices by more than the 33 percent already accepted by Japanese steelmakers. However, some of China's larger mills have already signed deals to buy iron ore at the price accepted by Japanese mills. Page 17. - - - - Australian oil and gas producer Santos has taken a large stake in New South Wales (NSW)-based coal-seam gas explorer Eastern Star Gas. Santos says it will pay Houston's Gastar Exploration A$300 million for its 35 percent interest in Eastern Star's Gunnedah Basin tenements in NSW and has signed a A$176 million deal to acquire a further 19.9 percent stake in Eastern Star from Hillgrove Resources (Frankfurt: 859537 - news) . Santos chief executive David Knox yesterday praised Eastern Star for its success in extracting gas from the basin's coal seams. Page 18. - - - - Singapore Airlines (C6L.SI - news) -backed budget carrier Tiger Airways will begin flying between Sydney and Melbourne today in direct competition with Qantas Airways (Stuttgart: 896435 - news) and Virgin Blue. Tiger says it will offer four flights daily with one-way fares beginning at A$39, and will begin flights from Sydney to Adelaide by the end of the month. The move comes amid increased competition in the aviation market, with broker JPMorgan reporting that Qantas suffered a 9 percent fall on domestic routes and a 28 percent drop on international routes in May. Page 18. - - - - THE AUSTRALIAN (www.theaustralian.news.com.au) Bankers have warned that rising unemployment and declining credit growth will increase short term pressure on businesses and consumers. Westpac Banking Corporation chairman Ted Evans said that while the systemic threat to the entire banking system had now subsided, the bank was expecting slower loan growth in the short term as consumers and businesses deleveraged their balance sheets. 'It is expected that more customers will come under pressure as the effects of the slowing activity becomes more widespread,' Mr Evans said yesterday. Page 17. - - - - Australian credit unions and building societies have recorded a jump in retail deposits after their push to compete more aggressively with major banks. Analyst KPMG says its research shows that the retail deposit base of credit unions and building societies in the nine months to March 31 increased by 11 percent and 9 percent respectively, compared with the 16 percent growth by major banks and a rise of just 4 percent for regional banks, mainly Bank of Queensland, Suncorp and Bendigo Bank. Page 17. - - - - Woodside Petroleum (Berlin: WOPA.BE - news) has dismissed a report that start-up costs for its proposed Browse LNG project in the Kimberley would blow out to A$50 billion. A spokesman for Woodside yesterday described as 'grossly misleading' a newspaper report that claimed the cost of building the new plant and infrastructure would be similar to that of the Chevron (NYSE: CVX - news) -operated Gorgon project, which was expected to cost A$50 billion but had nearly triple the available gas. The spokesman declined to give a development cost for the project. Page 18. - - - - Mining company BHP Billiton (LSE: BLT.L - news) is expected to make an announcement this month on the fate of its Yabulu nickel refinery in Townsville. A BHP spokesman said yesterday that a review of the refinery had been completed but a decision had not yet been made on whether it would be sold, modified or closed. In January, BHP closed its Ravensthorpe nickel project and shut down a section of the Yabulu plant that had processed Ravensthorpe's concentrate, cutting the workforce by 350 to 950 workers. Page 18. - - - - THE SYDNEY MORNING HERALD (www.smh.com.au) Rupert Murdoch's new chief operating officer at News Corporation (NASDAQ: NWS - news) could be end up being paid more than his boss, according to stock exchange filings. Chase Carey stands to be paid up to US$43.1 million in his first year, including a US$10 million cash signing-on fee. The base salary is identical to that of Mr Murdoch and Mr Carey's predecessor Peter Chernin. Mr Carey's bonus will depend on earnings-per-share gains and, unlike shareholders, he will largely be shielded from asset writedowns and restructuring costs. Page 17. - - - - The Commonwealth Bank of Australia has blamed an 'offshore' cyber attack for throwing its NetBank accounts into chaos. Hundreds of thousands of customers have been blocked from seeing past transactions over the past four days and the bank has given no date for when it expects the problem to be resolved. CommChief information officer Michael Harte said the malicious data, which had been quarantined, was probably a denial-of-service attack by 'offshore' hackers. Page 17. - - - - National Australia Bank (NAB) has offered to buy back US$250 million (A$309 million) of old debt at a substantial discount. Analysts says NAB has moved to take advantage of the freeze in international credit markets and a resulting fall in prices by offering to buy back the long-term borrowings at a 37.5 percent discount. The debt was issued a year before the sharemarket crash in 1987 and has no maturity date. NAB's offer follows similar recent moves by other financial services groups.
Page 18 - - - - Australia and New Zealand Banking Group (ANZ) has moved closer to acquiring some of the Asian assets of the Royal Bank of Scotland (LSE: RBS.L - news) (RBS). ANZ has been granted preferred bidder status and has begun talks with RBS regarding assets in Hong Kong, Singapore, Taiwan, Indonesia and Vietnam. An ANZ spokesman said last night the bank was one of several parties involved in a competitive sale process being conducted by the RBS group, which hoped for an agreement before its interim results next month. Page 17. - - - - THE AGE (www.theage.com.au) China has confirmed its position as Australia's biggest export customer. China assumed the title from Japan in March, and the figures for May released yesterday have solidified its position. Exports to Japan collapsed in recent months from more than A$6 billion a month in November to A$2.5 billion in May. Austrade's chief economist Tim Harcourt says Japan's economy is shrinking and small and medium-sized Australian businesses now find it easier to find customers in China. Page 1. - - - - Australian car maker Holden is facing an uncertain future in the wake of the Chapter 11 bankruptcy of its United States parent company General Motors Corporation (NYSE: GM - news) . Auditor Deloitte's Clive Mottershead said Holden's 'interdependence' with the now-bankrupt GM, combined with the Australian car maker's annual loss of US$70 million (A$86.8 million), had produced 'a material uncertainty which may cast significant doubt about its ability to continue as a going concern.' Page 1. - - - - The departing head of Bendigo and Adelaide Bank says the Federal Government's wholesale funding guarantee has allowed the four major banks to enjoy 'a privileged position in the market.' Rob Hunt says smaller banks have to pay almost double what the Big Four banks are paying to access the Government's scheme. 'The result has been a significant reduction in competition in some channels to market and if this is not balanced, the nation risks a patchy recovery,' said Mr Hunt. Page 3. - - - - Veteran Macquarie Group chairman David Clarke has resigned from several chairman roles including his position at industrial property company Goodman Group. Mr Clark took extended leave last November to have treatment for cancer and recent tests have shown the cancer is in remission. Mr Clarke said he would retire immediately from Goodman and was stepping down as chairman of wine interest Australian Vintage but would return to his role at the investment bank to manage succession planning for the bank's eight-member board. Page 3. Keywords: DIGEST AUSTRALIA BUSINESS ... Keywords: DIGEST AUSTRALIA BUSINESS ... Keywords: DIGEST AUSTRALIA BUSINESS
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