CVC Asia Pacific offers up a stable of assets to keep its stake in Nine, while Coca-Cola Amatil declines a drink or two.

Without a compelling recovery story to tell lenders, companies with big debt burdens are going to find it hard to secure refinancing for the foreseeable future. CVC Asia Pacific faces an even harder task with some of its lenders looking for an equity conversion, so it’s hardly surprising that more Nine Entertainment assets are up for sale in order to address that $2.7 billion in debt. Meanwhile, Coca-Cola Amatil has turned down some Foster’s Group assets as it reaches for more Beam Group products. Elsewhere, Echo looks like it has had enough of James Packer’s games and is headed for the Takeovers Panel, Rio Tinto has given us more reason to be concerned about Pacific Aluminium valuations and Teck Resources looks to have crept just a little further up the Fortescue Metals register.

CVC Asia Pacific, Nine Entertainment, Ticketek, Allphones Arena

Private equity firm CVC Asia Pacific has added more assets to the list that it’s willing to do without in order to keep the bulk of Nine Entertainment in its stable. As US hedge funds Apollo Global Management and Oaktree Capital dream of accumulating positions in Nine’s debt large enough to force an equity conversion, The Age reports that Ticketek and Allphones Arena will be shopped around. It’s estimated that the two assets should be worth something in the order of $600 million, with Ticketek making up the bulk of that. The newspaper understands that a formal sales process will begin next month, run by UBS, while two private equity firms have already held initial discussions and Ten Network has been picked out as a soft sell target.

These assets already go with ACP Magazines that CVC has put up as a potential sale candidate, with the price that it would be willing to take for the business reportedly dropping to $300 million. Seven West Media is the most likely buyer due to its Pacific Magazines business, although the consumer watchdog has flagged such a deal as potentially problematic given the dominance that Seven would then have over the industry.

For those happy to look down the road at the $2.7 billion in debt that matures in February next year, CVC has identified $900 million in assets that it’s willing to part with to keep the rest of Nine Entertainment together.

Coca-Cola Amatil, Foster’s Group

Coca-Cola Amatil has declined a couple of drinks from Foster’s Group – now in the hands of SABMiller – specifically, the company’s spirit and pre-mixed ones. The decision comes amid due diligence that CCA has been conducting on three Foster’s assets, the others of which are the Australian non-alcoholic beverages division and the beer and spirits arm in Fiji.

If CCA had taken all those businesses it would have set them back about $200 million, maybe a bit more. But chief executive Terry Davis has opted for a broadening of his company’s relationship with Beam Global instead of picking up the spirits and pre-mixers from Foster’s.

Precisely where CCA purchases its grog is of less concern than whom it sells the product to and how much they’ll get for it. Given the pressure that the big supermarkets look set to exert upon each other in the grog market, this point could become quite prominent in coming months.

Crown, Echo Entertainment

Late yesterday afternoon, Crown finally submitted a substantial holder notice to the ASX regarding Echo Entertainment, stating that it was a substantial "relevant interest” in the rival casino company. As pointed out by Business Spectator’s Stephen Bartholomeusz, the plot is thickening beyond anyone’s imagination. It appears James Packer asked for a board seat before even officially owning the 9.2 per cent interest. It’s the kind of opening gambit his gambling-loving father Kerry Packer could be enormously proud of.

But the feel-good story ends there. Media reports indicate that Echo is going to apply to the Takeovers Panel to compel Crown to clarify the nature of its interest.

Rio Tinto, Pacific Aluminium

Rio Tinto has announced that it could reduce output from its Tasmanian aluminium smelter, further clouding just how much it should expect to generate from the sale of unwanted aluminium assets. The Bell Bay smelter is part of the company’s Pacific Aluminium division, which has been fenced off for a potential IPO or trade sale.

But since that announcement in late last year, many of the assets in the portfolio have either been scaled back or shut down altogether. Valuations were widely spread in the beginning for Pacific Aluminium – highlighting the bravery required to enter the industry at the moment – with anything from $US5 billion to $US9 billion being thrown around.

Meanwhile, Rio says it’s planning to launch the largest ever investment by an Australian company in India with $2 billion going to an iron ore joint venture the resource rich eastern state of Orissa. Rio owns 51 per cent of the joint venture, while Odisha Mining Corp owns 44 per cent and NMDC the remaining 5 per cent. Steel production in India is expected to grow by 9 per cent a year over the next five years

News Limited, REA Group

Now that News Limited chief executive Kim Williams is settled in his new job, speculation is shifting to what acquisitions he might fancy. News has already been named as a potential buyer of Australian Independent Business Media (publisher of Business Spectator), but a rival publisher has suggested that Williams might also be interested in classifieds.

News currently owns 61.4 per cent of real estate advertising business REA Group – largely a legacy of its run at the company in 2005 where it grabbed 58 per cent – with the rest of the register held by fund managers. The Australian Financial Review suggests that Williams could be interested in buying out the minority shareholders given the strength of REA’s revenue growth. REA is considered a less mature business than other online advertisers like Seek or so there’s still growth to be found.

Fortescue Metals Group, Teck Resources

Canada’s Teck Resources isn’t exactly moving at breakneck speed on the Fortescue Metals Group register, but something’s going on. According to Fortescue’s top 20 shareholders list, Quinambo Nominees has increased its stake in the iron ore miner to 2.94 per cent in February from 2.89 per cent in March. Teck has been widely reported to be the company that Quinambo, the nominee company of Royal Bank of Scotland, is buying up shares for.

Wrapping up

OneSteel has offloaded its Piping Systems business to US-based MRC Global for $67 million. When combined with the sale of its associated property investments, OneSteel expects to collect something around $100 million, although the second portion of the sale has not been finalised yet.

Ludowici might be frustrated by the Takeovers Panel, but that hasn’t stopped hedge funds from picking up stakes in the highly sought-after mining services firm. The Australian Financial Review reports that a number of hedge funds have secured significant stakes in Ludowici as Denmark’s FLSmidth and UK-listed Weir Group fight for the company. The same newspaper says that AGL Energy looks set to increase the margin of its $650 million hybrid raising thanks to feedback from the market.

And finally, some have been surprised by the $68 million that Kagara Nickel got for its Lounge Lizard deposit. Western Areas picked up the asset, as expected, but some onlookers tipped a price closer to $100 million.


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