Tiger agrees to refund customers, BHP makes $12bn buy: Midday roundup

Grounded airline Tiger Airways has agreed to refund flights for customers that booked departures during July and August.

The Australian Competition and Consumer Commission announced this morning that Tiger Airways chief Tony Davis has committed the company to processing refunds and contacting customers that had booked flights.

“The ACCC decision to accept this commitment from Tiger Airways provides clarity to affected consumers and ensures that they are not left out of pocket,” chairman Graeme Samuel said.

“The ACCC, together with other Australian Consumer Law regulators, have raised various concerns with Tiger Airways in relation to the treatment of consumers affected by the suspension.”

Refunds will be received within 20 days of flights being cancelled, the ACCC said, while it also confirmed that customers who booked flights for between August 1 and August 31 would be able to cancel them and receive refunds or credits.

BHP offers $US12 billion for Petrohawk

Mining giant BHP Billiton will pay $US12.1 billion for gas producer Petrohawk Energy in the United States, both companies have announced.

The deal will see BHP pay $US38.75 for every Petrohawk share.

“This transaction would build on our recent acquisition of the Fayetteville shale in Arkansas and provides the potential to more than double our existing resource base,” BHP petroleum chief J. Michael Yeager said in a statement.

Petrohawk controls about one million net acres in Texas and Louisiana.

“If the whole continent of Australia used electricity sourced from natural gas…this thing we purchased would supply that need for 18 years,” Yeager said.

Shares down after weak US lead

The Australian share market has opened lower this morning after yet another weak night on the United States sharemarket, where investors have became worried after debt talks ended with President Barack Obama walking out on negotiations.

The benchmark S&P/ASX200 index was down 24 points or 0.54% to 4466.5 at 12.10 AEST, while the Australian dollar opened lower to $US1.07c.

ANZ shares fell 0.81% to $20.81, while Commonwealth Bank shares fell 0.69% to $48.68. Westpac lost 0.53% to $20.66 while Westpac rose 0.57% to $30.19.

In the United States, the Dow Jones Industrial Average fell 54 points or 0.44% to 12,437.12.

S&P warns US on debt

Standard & Poor’s has warned US politicians and business groups that a ratings cut might be on the cards if the country fails to make debt repayments, Reuters reports.

The announcement follows a warning from Moody’s that the country could lose its AAA rating if an agreement on the statutory borrowing limit is not resolved soon.

China, the US’s biggest foreign creditor, has likewise urged the US government to pursue responsible policies.

The comments come as US Federal Reserve Chairman asked Congress to look at the “timing and composition” of its budget cuts, given that “sharp and excessive cuts in the very short term would be potentially damaging” to a recovery.

Republicans are holding out for $US2.4 trillion in spending cuts before agreeing to lift the $US14.3 trillion US government borrowing limit.