Sydney Declines; Elections on Aug 21

Chandrasekhar Atreya
19 Jul, 2010
New York City

Stocks in Australia track lower after U.S. indexes plunged more than 2.5% on Friday. Prime Minister Gillard sets August 21 for the general election. U.S private equity funds Carlyle and TPG win the takeover of Healthscope. Dampier Gold begins subscription for its initial public offering.

[R]6:00 PM Sydney, Australia – Stocks in Australia track lower after U.S. indexes plunged more than 2.5% on Friday. Prime Minister Gillard sets August 21 for the general election. U.S private equity funds Carlyle and TPG win the takeover of Healthscope. Dampier Gold’s IPO begins today. Ausenco wins contract for Canada’s Taseko mine development design.[/R]

Australian markets made a modest recovery in the afternoon trading on Monday after earlier tumbling as much as 1.8% following Friday’s plunge on Wall Street.

The ASX 200 Index lost 1.46% or 64.40 points to close at 4,358.30 in Sydney today.

Prime Minister Julia Gillard on Saturday announced that a general election would be held on August 21 in line with her pledge to seek a governing mandate in her own right.

Gillard who deposed Kevin Rudd as Prime Minister in a political coup within the ruling labor party on June 24, had promised quick election.

U.S. private equity funds Carlyle Group and TPG Capital have agreed to buy Healthscope Ltd for A$2 billion at A$6.26 per share cash offer. The offer values the stock at 39% more than the stock price on May 14 when the first offer for takeover was made. It is also at 16% premium to where it was trading on last Friday.

The offer values the company at A$2.7 billion including the debts and shareholders should accept the offer, the Melbourne-based company said today. Healthscope’s shares surged 11% immediately after the announcement ending two months of speculation. The successful bidders made the offer after trumping a bid from Kohlberg Kravis Robert & Co.

Dampier Gold Ltd’s IPO opened on Monday offering 40 million shares at 50 cents each. The IPO will close on August 13, with an expected listing date of late August on the Australian Stock Exchange.

Dampier has entered into an agreement with Barrick Gold Corp to acquire a package of tenements covering nearly 700 square kilometers in Western Australia.

Resources News

Engineering and project management group Ausenco Ltd won a contract to provide engineering and design services for Canadian miner Taseko Mines.

Ausenco CEO Zimi Meka said the work would initially involve managing the first stage of the engineering and procurement phase of the Prosperity gold and copper project in British Columbia and would ramp up as Taseko’s key milestones were reached.

Santos has executed a self-arranged A$2 billion bilateral bank loan facility to give its balance sheet flexibility for its growth plans that include its Gladstone LNG project in Queensland.

Santos Ltd Executive Vice resident and CFO Peter Wasow said the new facility provides additional liquidity to the company during the construction period of the Gladstone and Papua New Guinea LNG projects. The Gladstone project is scheduled to begin production in 2014, while the PNG project is expected to do so in late 2013 or early 2014.

Woodside Petroleum’s former head of exploration, Dr. Agu Kantsler, responsible for the discovery of the company’s valuable Pluto gas, has been appointed to the board of Oil Search Ltd of Papua New Guinea.

Investment in electricity generation is likely to slump partly due to the ongoing uncertainty over climate change policies, according to the industry body the Energy Supply Association of Australia.

Genesis Resources Ltd has announced the preliminary results from airborne VTEM survey over its McArthur River Manganese project in Northern Territory. An interpreted east-west trending structure extending across the survey area has been found from the Versatile Time Domain Electromagnetic data.

Pedro Kastellorizos, Managing Director, said “we are excited to have received such an excellent preliminary result over the McArthur River Project.”

Perth-based Blaze International is embarking on a major systematic exploration program at its highly prospective Yeelirrie Valley uranium sites in Western Australia in search of extensions to BHP’s neighboring world-class uranium deposits. The exploration program, which aims to define extensions to the mineralization, will be funded from the proceeds of a $1.2 million-plus capital raising completed last week.

Coalworks says a review of its initial drilling results at the Ferndale project located at Yarrawa in the prime Hunter Valley coal area has confirmed the presence of coal in Newcastle and Upper Whittingham Coal Measures.

The results have further indicated an increase in the exploitation potential of the Newcastle Coal Measures from the previous figures of 10 to 50 million tons to an updated 50 to 80 million tons with open cut potential.

Accent Resources is evaluating “all options” in respect of its flagship Magnetite Range project including joint venture, sale and farm-in.