BMA row spooks Japanese investors

Japanese investors are increasingly concerned about Australia's industrial relations environment following the 18-month industrial dispute that has hit BHP Billiton Mitsubishi Alliance's Queensland coal operations, according to The Australian.

Steelmakers and trading companies raised their worries over the dispute in talks in Tokyo with Queensland Treasurer Tim Nicholls, who had been trying to attract investment for the rapid expansion of coal and coal-seam gas projects.

Nicholls, who is also the state's Trade Minister, met Mitsubishi, steelmaker JFE and representatives from several of the large Japanese trading companies, including Sumitomo. The Treasurer's office would not confirm which firms had raised concerns.

"A number of the steel companies here in Japan are concerned about security of supply,” he said. “They are concerned about the uncertainty that it engenders for them in terms of their supply of raw materials, so the longer it goes, the more the concern seems to increase.”

Tinkler has Whitehaven in the bag, says Haggarty

A presentation at UBS’s offices by Whitehaven Coal boss Tony Haggarty on Wednesday seems to have improved the market’s confidence in Nathan Tinkler’s ability to finance a $A5.25 billion leveraged buyout of the coal miner, according to the Australian Financial Review.

One of the key questions surrounding the deal is whether 16.7% of the register – beyond the 48.3% already participating – is willing to take unlisted scrip.

The group representing 48.3% is believed to include Tinkler, Farallon Capital Partners, First Reserve, AMCI, Kuok Group, Burlingham International and JCP Investment Partners.

Haggarty is said to have told investors there was a verbal indication from that block that if 16.7% of the register did not take unlisted scrip, other equity investors were ready to step in and fill the nearly $900 million hole.

Australian companies are underachievers in shareholder return

Australian companies are under­performing in creating value for shareholders compared with their peers in the UK and US, despite better growth in gross domestic product, a report by the Boston Consulting Group says, according to the Australian Financial Review.

Managers need to shrug off the excuse of uncertainty to act boldly in their shareholders’ interests, it says.

Australia’s total shareholder returns have been 2.5% over the past two years, compared with more than 8% in the UK and about 15% in the US, it says.

BCG partner Ramesh Karnani said the flat stockmarket was partly the fault of Australian managers’ caution.

“When you look at some companies in the US, they have moved faster in restructuring themselves to the new environment,” he said.

Unproductive capital needed to be recycled by selling underperforming businesses, and smart managers would take the opportunity to make acquisitions while prices were low.