Cash Converters sells 30% stake to US group: Midday Roundup

Cash Converters International has entered a strategic alliance with pawnshop operator EZCORP, selling 30% of the business and making the US-based company its majority shareholder, owning 53%.

The total offer is worth $70 million, with shares proposed at a price of $0.91 per unit.

The company said in a statement it will be able to roll-out its integrated financial services offer under the Cash Converters brand and will expand into new locations.

Chief executive Peter Cumins said the partnership will help the company grow into new markets.

“By giving us access to EZCORP’s financial resources, management expertise and systems, this strategic alliance both expands and accelerates our strategic growth plan, opening up many new opportunities for Cash Converters,” he said.

NAB resolves tax dispute

NAB has resolved a tax dispute with the ATO over the treatment of the Exchangeable Capital Units capital raising, undertaken in March 1997.

In a statement made this morning, NAB said it will obtain a refund of some amounts previously paid to the ATO in relation to the ExCaps assessments. Assessments for the decade between 1997-2007 are reduced, resulting in a reduction of approximately $142 million subject to final interest and adjustments.

NAB group chief financial officer Mark Joiner said in a statement he welcomed the resolution.

“This removes the need for potentially long and costly legal proceedings and finalises a long-standing issue,” he said.

Warburton accused of taking critical documents

Ten Network Holdings chief executive James Warburton has been accused of taking commercially sensitive documents when leaving his role at Seven Media Group.

Today lawyers for Seven told the New South Wales Supreme Court that Warburton had taken the documents when leaving the offices.

“Certain documents had been removed by the first defendant or on his behalf from our premises,” Seven barrister Dauid Sibtain told the court, according to AAP.

Libya turmoil continues

Gold and oil prices were stronger overnight as the political turmoil in Libya continued, and the UN Security Council has rejected the nation’s call for a meeting to discuss Western air strikes.

There are also reports this morning that the sixth son of Muammar Gaddafi, 27-year-old Khamis, has been killed.

Market starts solidly after yesterday’s gains

The Australian sharemarket has started the day stronger, after a solid lead from Wall Street overnight, amid hopes the recent panic over geopolitical events might subside.

At 12.10 AEST, the S&P/ASX 200 was 0.37% higher at 4659.9 points, paring gains from a 0.5% lift at the open.

Resource companies and financials lifted up the market in early trade, with market heavyweight Telstra also stronger. The Australian market closed 0.35% higher yesterday, led by resources stocks, to 4624.8 points.

S&P delivers three-day run

Overnight, the S&P 500 has delivered a solid three-day performance, boosted by the $US39 billion offer from AT&T for Deutsche Telekom’s T-Mobile USA.

The Dow Jones industrial average lifted 1.50% to close at 12,036.53 points, while the Standard & Poor’s 500 Index gained 1.50% to 1,298.38, and the Nasdaq Composite Index grew 1.83% to 2,692.09.

New Hope profit rises

Coal miner New Hope has recorded a net profit of $407.54 million for the half year ending January 31, up by $111.6 million from the previous corresponding period.

However, the company said operating profit fell by 27.4% to $81.1 million due to the rising Australian dollar and transport costs.

New Hope managing director Rob Neal said the Queensland floods did not significantly impact the business.

“As a result, we are in a good position to take advantage of firming coal prices once transport infrastructure in the region has been repaired,” Neale said in a statement.

“The company is working closely with QR to maximise railings once the line is re-opened and to minimise the impact on the 2011 full year result.”

New Zealand growth to stall in 2011

New figures from the International Monetary Fund show New Zealand’s economy will grow by only 1% this year before earthquake recovery efforts lift growth to 4% in 2012.

As part of the IMF’s annual review, it said the estimated damage of the earthquakes in New Zealand during both September and February is estimated at $NZ15 billion, roughly 7.5% of GDP.

“Monetary policy will need to be tightened when it becomes clear that the recovery is under way,” the IMF said in the statement posted on its website. “The RBNZ needs to guard against medium-term inflation expectations becoming anchored at too high a level.”

The fund added the New Zealand central bank has “scope to cut the policy rate and provide liquidity support for banks if necessary”.