BUSINESS FAILURES – AUSTRALIA

Bank bad debts to rise $1.2b, UBS downgrades earnings

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Original article by James Eyers
The Australian Financial Review – Page: 18 : 15-Apr-16

Australian banks’ exposure to corporate failures will affect their financial results when they are reported in early May 2016. Jonathan Mott, an analyst at UBS, wrote in a note to clients that total exposures to companies such as Arrium, the Wiggins Island Coal Export Terminal, Dick Smith, McAleese and Slater & Gordon would be around $A899 million for National Australia Bank, $A809 million for Westpac, $A688 million for the ANZ Bank and $A657 million for the Commonwealth Bank.

CORPORATES
NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, WESTPAC BANKING CORPORATION – ASX WBC, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, UBS HOLDINGS PTY LTD, DICK SMITH HOLDINGS LIMITED – ASX DSH, SLATER AND GORDON LIMITED – ASX SGH, ARRIUM LIMITED – ASX ARI, PEABODY COALTRADE AUSTRALIA PTY LTD, McALEESE LIMITED – ASX MCS

Mentha steps in to fix Arrium

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Original article by Simon Evans, Tim Binsted
The Australian Financial Review – Page: 7 : 14-Apr-16

KordaMentha’s Mark Mentha says he will consider every option for restructuring steelmaker and iron ore miner Arrium. Mentha was appointed as administrator of Arrium after the Australian Workers’ Union, lenders and bondholders succeeded in removing Grant Thornton from the role. Mentha says Arrium’s collapse was primarily due to a decline in relations between the group’s board and its lenders. The first creditors’ meeting is scheduled for 19 April 2016.

CORPORATES
ARRIUM LIMITED – ASX ARI, KORDA MENTHA AND COLLEAGUES PTY LTD, GRANT THORNTON AUSTRALIA, AUSTRALIAN WORKERS’ UNION-FEDERATION OF INDUSTRIAL, MANUFACTURING AND ENGINEERING EMPLOYEES, BHP BILLITON LIMITED – ASX BHP, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, MOLY-COP, GSO CAPITAL PARTNERS LP, SOUTH AUSTRALIA. DEPT OF THE PREMIER AND CABINET, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, ANSETT AUSTRALIA HOLDINGS LIMITED

The alternative to a Bank Commission – tackle Australia’s massive ‘cash economy’

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Original article by Gary Morgan
Market Research Update – Page: Online : 12-Apr-16

The cost and distraction of a Bank Royal Commission would be expensive and unnecessary. Banks have high customer satisfaction ratings. Today Australia needs the banks and other financial institutions to be more involved in helping businesses and their customers in difficult financial times. Much more important to the electorate is Australia’s massive real unemployment and under-employment – in March 11 per cent unemployed and 7.8 per cent under-employed . The situation will not improve with recent industry lay-offs. Many of Australia’s business failures have been caused by falling commodity prices and unrealistic work practices upheld by outdated industrial relations laws. With the lack of sufficient work many Australians see no alternative but to be part of the massive cash economy. Both sides of politics need to present to the electorate policies which tackle this problem – only then will State and Federal Governments have any hope of cutting the massive government deficit and collecting sufficient additional revenue needed for education, hospitals, roads, transport, etc.

CORPORATES
ROY MORGAN RESEARCH LIMITED, ARRIUM LIMITED – ASX ARI, WOOLWORTHS LIMITED – ASX WOW, MASTERS HOME IMPROVEMENT AUSTRALIA PTY LTD, DICK SMITH HOLDINGS LIMITED – ASX DSH, QUEENSLAND NICKEL PTY LTD

Vultures circle fallen Arrium

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Original article by Paul Garvey
The Australian – Page: 19 & 23 : 8-Apr-16

An unnamed investment banker says Arrium’s voluntary administrators are likely to seek new discussions with GSO Capital Partners, whose $A1.2bn bailout proposal was rejected by Arrium’s lenders. Private equity firms are likely to have strong bargaining power in any negotiations to buy Arrium’s assets, as the failed iron ore miner and steelmaker’s lenders are unsecured creditors. Arrium boasts a global workforce of 22,000, with 7,000 employees in Australia.

CORPORATES
ARRIUM LIMITED – ASX ARI, GSO CAPITAL PARTNERS LP, GRANT THORNTON AUSTRALIA, THE BLACKSTONE GROUP LP, MOLY-COP, ALLAN GRAY AUSTRALIA PTY LTD, MORNINGSTAR PTY LTD, BLUESCOPE STEEL LIMITED – ASX BSL

Dick Smith brand to be resurrected by e-commerce pioneer

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Original article by Sue Mitchell
The Australian Financial Review – Page: 13 & 18 : 15-Mar-16

Australian businessman Ruslan Kogan has bought Dick Smith Holdings’ intellectual property through an auction run by the receiver of the failed consumer electronics retailer. The size of the deal has not been disclosed. The site DickSmith.com.au will operate independently of Kogan.com. Kogan wants to list his company on the Australian stock exchange and raise $A300 million from investors.

CORPORATES
KOGAN TECHNOLOGIES PTY LTD, DICK SMITH HOLDINGS LIMITED – ASX DSH, FERRIER HODGSON AND COMPANY, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, JB HI-FI LIMITED – ASX JBH, KPMG AUSTRALIA PTY LTD

Graphite junior in shock collapse

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Original article by Paul Garvey
The Australian – Page: 19 & 20 : 4-Mar-16

Australian-listed Triton Minerals has been placed in the hands of administrators from Ferrier Hodgson. The group had recently released an update assessment of the prospects for its Mozambique graphite project, and it is not believed to have any significant debt. However, three directors have left Triton since December 2015, including former CEO Brad Boyle. Triton’s shares reached a high of $A0.54 in April 2015, and last traded at just $A0.061.

CORPORATES
TRITON MINERALS LIMITED – ASX TON, FERRIER HODGSON AND COMPANY, FORTESCUE METALS GROUP LIMITED – ASX FMG, GMP SECURITY PTY LTD, YICHANG XINCHENG GRAPHITE COMPANY LIMITED

Harvey Norman takes a look at Dick Smith’s Move stores

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Original article by Sue Mitchell
The Australian Financial Review – Page: 15 : 1-Mar-16

The financial accounts of Dick Smith Holdings show that it posted a loss of $A60.5m in November 2015 and $A100.3m in December. Meanwhile, rival retailer Harvey Norman has indicated that it might be interested in taking over Dick Smith’s four Move stores that are located at airports. Executive chairman Gerry Harvey says he usually shuns airport stores due to high rents and overheads, adding that he would only be interested in taking over the Move leases if the stores are profitable.

CORPORATES
DICK SMITH HOLDINGS LIMITED – ASX DSH, MOVE, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, FERRIER HODGSON AND COMPANY, SYDNEY AIRPORT – ASX SYD, CLIVE PEETERS, RICK HART DISCOUNTS

Aurizon hit by Queensland Nickel collapse

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Original article by Mark Ludlow, |Primrose Riordan
The Australian Financial Review – Page: 3 : 19-Jan-16

Faced with financial problems, Clive Palmer’s Queensland Nickel has opted for voluntary administration, with FTI Consulting appointed as administrators. Queensland Nickel MD Clive Mensink said on 18 January 2016 that the company has the potential to return to profitability. It was therefore "business as usual." Queensland Nickel”s creditors include Aurizon, Powerlink, Ixom and the Port of Townsville.

CORPORATES
QUEENSLAND NICKEL PTY LTD, FTI CONSULTING PTY LTD, AURIZON HOLDINGS LIMITED – ASX AZJ, POWERLINK QUEENSLAND, IXOM AUSTRALIA, PORT OF TOWNSVILLE, PALMER UNITED PARTY, STANWELL CORPORATION LIMITED, AUSTRALIA. DEPT OF THE TREASURY

New Dick Smith CEO hopes to find a buyer

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Original article by Patrick Hatch
The Australian Financial Review – Page: 13 & 18 : 13-Jan-16

Receiver Ferrier Hodgson has received more than 40 expressions of interest in buying failed consumer electronics retailer Dick Smith. Meanwhile, Don Grover has been appointed as interim CEO following the resignation of Nick Abboud. He had the led the company since its acquisition by Anchorage Capital Partners in 2012. The slump in Dick Smith’s share price prior to its collapse had reduced the value of Abboud’s shareholding by almost $A30m.

CORPORATES
DICK SMITH HOLDINGS LIMITED – ASX DSH, FERRIER HODGSON AND COMPANY, FUSION RETAIL BRANDS PTY LTD, JB HI-FI LIMITED – ASX JBH, DIANA FERRARI (AUSTRALIA) PTY LTD, WILLIAMS SHOES, MATHERS SHOES PTY LTD, COLORADO GROUP LIMITED, FORAGER FUNDS MANAGEMENT PTY LTD, ANCHORAGE CAPITAL PARTNERS PTY LTD, OWNERSHIP MATTERS PTY LTD, WOOLWORTHS LIMITED – ASX WOW, McGRATH NICOL AND PARTNERS SERVICES PTY LTD, STANDARD AND POOR’S ASX 200 INDEX

Rivals to gain from Dick Smith’s demise

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Original article by Jessica Gardner
The Australian Financial Review – Page: 15 : 7-Jan-16

Thomas Kierath of Morgan Stanley expects the collapse of Dick Smith to boost the annual sales of JB Hi-Fi and Harvey Norman by around $A200m apiece, and lift their net profits by up to $A20m. David Thomas of CLSA says JB Hi-Fi is likely to gain the most benefit from the closure of any Dick Smith stores, although Matthew Felsman of APP Securities notes that signs of slowing demand for Apple’s iPhone may hit JB Hi-Fi.

CORPORATES
DICK SMITH HOLDINGS LIMITED – ASX DSH, JB HI-FI LIMITED – ASX JBH, HARVEY NORMAN HOLDINGS LIMITED – ASX HVN, MORGAN STANLEY AUSTRALIA LIMITED, CLSA AUSTRALIA PTY LTD, APP SECURITIES PTY LTD, APPLE INCORPORATED, THE GOOD GUYS, WOW SIGHT AND SOUND PTY LTD, FORAGER FUNDS MANAGEMENT PTY LTD