Timbercorp set to be killed off, Shares rise: Economy roundup

The Australian Securities and Investments Commission has introduced new rules that will provide easier methods for retail investors to participate in corporate fundraisings.

The administrator of Timbercorp has recommended that creditors wind up the company.

Kordamentha said that the company does not have enough money to either fund a restructure or continue its operations.

“It is in our opinion that it would be in creditors’ interests for each company within [Timbercorp] to be wound up,” the administrator said in a report to Timbercorp creditors.

“No DOCA has been proposed and it is not in the creditors’ interests to bring the administrators to an end.”

The Australian sharemarket has opened higher today after positive financial leads from Wall Street overnight. The benchmark S&P/ASX200 index was up 23.6 points or 0.61% to 3915.7 at 12 noon AEST. The Australian dollar has also jumped to US80 cents.

ANZ shares have lifted 1.3% to $16.57, while NAB shares have also jumped 0.6% to $22.19. Westpac lifted 0.7% to $20.04 as Commonwealth Bank gained 0.8% to $38.39.

The country’s largest investment bank, Macquarie Group, will record a $130 million profit during the 2010 financial year on the sale of securities, it has said.

The company has raised around $324 million by selling income preferred securities at a 40% discount, while it said in a statement the profit from the sales would help offset increases in subordinated debt.

Meanwhile, real estate group ING Office Fund has finished a $330 million equity-raising that it will use to pay off debt.

“The strong result of the equity raising demonstrates the continued confidence and support in IOF’s traditional real estate investment trust model and strategy,” ING Office Fund chief executive Tino Tanfara said in a statement.

Minmetals mulls float

The Australian branch of Chinese group Minmetals will consider listing recently purchased assets from OZ Minerals.

Minmetals paid $US1.4 billion for the majority of OZ Mineral’s assets last week, in the largest Chinese acquisition of an Australian entity.

“If market conditions permit in the future… we can consider it,” said Wang Lixin, president of China Minmetals Non Ferrous Metals.

“In anticipation of at some stage floating some of the company again, we need to keep the market informed,” Minerals and Metals Group chief executive and former OZ Minerals chief Andrew Michelmore said.

New rules for capital raisings

The Australian Securities and Investments Commission has introduced new rules that will provide easier methods for retail investors to participate in corporate fundraisings.

In the new rules, shareholders may purchase shares worth up to $15,000 through plans with a prospectus, while companies and managed investment schemes can update the market through disclosure obligations and a ‘cleansing notice’ instead of a prospectus.

“The new equity raising policies released today seek to streamline the fundraising process by faster and more effective disclosure,” ASIC said in a statement.

“The measures also aim to make it easier to include retail investor participation in fundraisings by expanding situations where a full prospectus or product disclosure statement is not required.”

Congress urged to back financial reforms

In the US, treasury secretary Timothy Geithner has asked Congress to move quickly on the Obama administration’s new financial regulatory reforms.

He commented that the White House “decided that now is the time to pursue the essential reforms, those that address the core causes of the current crisis; and that will help to prevent or contain future crises”.

“We may disagree about the details, and we will have to work through those issues. But ordinary Americans have suffered too much; trust in our financial system has been too shaken; our economy has been brought too close to the brink for us to let this moment pass.”

Meanwhile, Wall Street posted gains after optimistic job market and regional manufacturing data was released. The Dow Jones Industrial Average gained 58.42 points or 0.69% to 8555.6.