Mitsubishi's effective standstill at Oakajee dealt a painful blow to the miners who were relying on the port and rail project to open up WA's Mid-West, but now a handful of affected companies are teaming up to take matters into their own hands – perhaps with the help of China. Elsewhere, Lynas raises some much-needed capital via a share sale, while MYOB's private equity owner may reduce its stake. And will Kim Williams return to Foxtel?
Cashmere Iron, Ferrowest, Gindalbie Metals, Golden West Resources, Padbury Mining, Sinosteel Midwest Corporation
A slew of Australian miners operating in Western Australia's Mid-West are said to have come together to hammer out an infrastructure plan to rival Mitsubishi's Oakajee port and rail project, which the Japanese developer has slowed to an effective halt.
Padbury Mining chief Gary Stokes tells The Australian the plan B had been in quiet development for months, but would be pursued more seriously after Mitsubishi fired most of its Oakajee staff last week as Chinese funding talks broke down. In Stokes' opinion, Oakajee is "dead".
Rival schemers are said to include Sinosteel Midwest Corporation, Gindalbie Metals, Cashmere Iron, Ferrowest, Golden West Resources and Padbury – the one notable exception from the region is Crosslands Resources, which is owned by Mitsubishi. Those involved have the same aim as the Japanese group did: to open up WA's next iron ore province for exports.
Stokes says most players have already lined up Chinese backers, whose funding will be critical. But ownership of the scheme would remain in Australian hands, with local superannuation funds and other long-term investors expected to take a 51 per cent stake.
It should be noted that Sinosteel and Gindalbie have distanced themselves from Stokes' comments, suggesting the plan is still in its very early stages. So don't expect any multi-billion-dollar announcements just yet.
News Ltd chief Kim Williams could soon find himself back in Foxtel's boardroom, after News lifted its stake in the pay-TV provider to 50 per cent via its purchase of Consolidated Media Holdings.
A source told the AFR there was a "very high likelihood" of Williams returning to the board of Foxtel, where he served as chief executive for 10 years until early 2011. However, it seems the appointment has not yet been formalised.
The ConsMedia takeover awards News, owner of Business Spectator, an extra two seats on the Foxtel board, bringing its total number of directorships to four.
Lynas has addressed delays at its Malaysian plant by launching a $200 million capital raising to bridge the newly exposed cash-flow gap.
The share offer comes after Lynas received a green light for its Malaysian processing plant following a lengthily legal battle with activists in the Asian country. The company had expected to begin processing ore at the plant last month, and to be generating income by the end of the year, but deadlines have blown out.
The new Lynas shares, offered to institutions and retail investors, have been priced at 75 cents a pop – a 6.8 per cent discount to its last-traded price of 80.5 cents. Lynas says the issue will cover working capital through to positive cash-flow, and provide a cash buffer for "unforeseen events" – with which it is now all too familiar.
JP Morgan has underwritten the raising.
MYOB may also be preparing to tap investors, with The Australian Financial Review indicating the privately-owned accounting software firm could launch a $115 million ASX-listed retail note as early as this week.
The paper says the new funds would allow private equity owner Bain Capital to lower its equity investment in the company, aiming to increase the total return once it exits its stake. The practice is not uncommon – you may recall TPG and Carlyle used a similar tactic to reduce their equity investment in Healthscope by $200 million in 2010, after buying the healthcare operator for $2.7 billion.
Morgan Stanley, UBS, Deutsche Bank and Macquarie are said to have been appointed on the raising, while ANZ and Westpac were also appointed to manage the sale.
National Australia Bank will pay $115 million to settle a shareholder class action brought by Maurice Blackburn, which alleged the lender was too slow to disclose its $1.2 billion exposure to sour US mortgage assets in 2008.
About 15,000 investors will share in the final sum, minus Maurice Blackburn's bill — estimated at about $10 million, according to The Australian. NAB's insurers will cover $50 million, with the bank left to pick up the remainder of the bill.
NAB, which will not admit liability, maintains the cost won't be material on earnings.
In NSW, the government is preparing to fill the second spot on its joint-sale mandate for its $3 billion sale of power assets, after the first-appointed advisor, Goldman Sachs, handed its recommendations to state Treasurer Mike Baird, according to the AFR.
Most major investment banks are expected to have pitched, but the paper likes the chances of "a nimble boutique with the right contacts," such as Lazard, Gresham or Greenhill.
Finally, the AFR reports mining junior Apollo Minerals has appointed RFC Ambrian to search for a strategic partner to speed up development at its Commonwealth Hill iron ore project, which has potential to be a high-quality open cut operation.
The project, which is expected to produce 2.5 million tonnes a year for 16 years, will cost about $US333 million ($320 million) to develop. This columnist wouldn't be surprised to see one or more of Apollo's potential Asian customers jump on board.