Executive Summary, September 14, 2009
By Scott Rochfort | smh.com.au | 14 September
Mike Smith...a licence to love all things Indian.
CBD
Fallen for an Indian motor
ANZ Bank's chief international man of intrigue, Michael "007" Smith, appears to have lost his passion for Aston Martins.
Delivering a speech to an Australia India Business Council lunch in Melbourne last Friday, Smith let it be known that he was on the hunt for an Ambassador.
Not the diplomatic type. But rather the automobile made by Hindustan Motors of India, which is the preferred means of transport for many Indian politicians.
Noting his interest in finding a Hindustan Ambassador with tail fins, Smith also showed he had done a quick search of the ANZ staff database.
"At ANZ we're incredibly multi-cultural. Among our top 10 surnames, two are Indian names," he said.
No doubt this has been helped by the company outsourcing more jobs to its Bangalore office where it now has 3500 staff. But the ANZ chief said he was proud that one Anglo name still remained the widespread surname among the bank's workforce.
"I'm pleased to say that Smith tops the list, in more ways than one."
Pitch for a pay rise
JB Hi-Fi seems keen to test the generosity of its shareholders following its recently reported 45 per cent lift in full-year profits.
The plasma screen, DVD and Playstation retailer has run up a few resolutions for its annual meeting next month, including one for granting 174,656 options to its chief executive, Richard Uechtritz, exercisable at $14.92 each.
These options are already well in the money, given JB shares closed at $18.10 on Friday.
Shareholders will also be asked to approve the granting of 92,311 options at the same price to its chief operating officer, Terry Smart.
Given the company's strong run – its shares have risen more than 11-fold since its 2003 listing – it is unclear if any shareholders will get too narky about Uechtritz's ballooning wallet.
Last financial year his total remuneration swelled from $2.5 million to $2.95 million, which included $1.8 million in bonuses and share payments.
Just two weeks ago the Rabbit Photo co-founder cashed in another $12.3 million when he sold down his stake in the company.
This was on top of the $18.43 million cashed in August last year. He still has 1.5 million shares worth around $27 million, not including his options.
Talk about making hay when the sun shines. JB Hi-Fi has also lobbed a resolution for shareholders to approve a 50 per cent pay rise for its non-executive directors to $900,000 a year.
Still playing
More musical chairs in the investment banking world.
There is now talk Credit Suisse's property banking team of David Dixon, Stephen Burns and Chris Bedingfield may be eyeing some vacant desks at JP Morgan.
The desks became vacant after most of JP Morgan's property team, including its head of real estate, Tim Church, headed off to help fill desks left vacant at UBS when its property team helped fill some desks at Merrill Lynch.
Sumatran securities
The former senior Macquarie executive and head commodities wheeler and dealer, Warwick Morris, has resurfaced with a new opportunity for investors.
Morris is drumming up interest in the planned float of an Indonesian gold explorer he chairs that is already preparing its financial accounts on a going concern basis.
In its prospectus Sumatra Copper & Gold notes the "significant uncertainty" of its ability to remain a going concern unless it can get investors to trump up $12 million for the public offer.
The prospector has already had a $US3 million ($3.5 million) debt with Macquarie (which is fully drawn) extended from July 31 to September 30, which coincidentally happens to be the date of its planned listing on the Australian Securities Exchange.
"The $US3 million debt facility has a September 30 trigger, which we are keen on not triggering," Morris told CBD.
However, he said he was "confident" the offer would be closed fully subscribed on Wednesday. Macquarie also happens to have a 19.5 per cent stake in the explorer and a further 6.2 million options that can be exercised if the explorer lists.
Morris, who retired from Macquarie in 2007, has 2.2 million options which also can be exercised at the 20c listing price. Sumatra Copper adds it has an "ongoing legal dispute" over one of its exploration licences.
"The process of resolving this matter may ultimately need to be decided by the Indonesian Supreme Court," it notes. But Morris assured CBD that this was not the explorer's main tenement.
In another snippet of information sure to make investors feel secure, the group notes changes in Indonesian regulations in January, which it says are in a "state of flux".
It notes it could have "difficulties enforcing the provision" of co-operation agreements it has with its Indonesian partners.
For some reason Macquarie seems happy to allow the Perth corporate adviser Argonaut Capital to take charge of this float.
If Sumatra Gold raises $12 million, about $2 million will be swallowed up in corporate and listing costs in the first two years and $3.9 million in repaying the Macquarie loan.
It does not seem to include legal costs. The company notes it has already paid $1.25 million in legal fees to its British solicitor in the two years leading up to the float.
Got a tip? email srochfort@smh.com.au
BUSINESS FOCUS
JAL in Air France talks
Struggling Japan Airlines has entered talks with Air France-KLM over a capital tie-up, according to a Saturday report in Japan's top-selling daily newspaper, Yomiuri.
The report said JAL hoped to expand its businesses in Europe via the alliance, but cited no sources. Officials at the Japanese airline could not be reached for comment.
JAL said on Friday it was considering various tie-ups with potential partners but nothing had been decided.
CanWest wins reprieve
Ten Network's majority shareholder, CanWest Global, was given another extension by lenders on Friday evening as it attempts to restructure debts of $C950 million ($1 billion).
The lenders agreed to extend the date by which Canwest must enter into a recapitalisation transaction to September 25, from September 11. Canwest holds 50 per cent of Ten's shares.
Praise for JB Hi-Fi
Highly profitable discount retailers like JB Hi-Fi had a lot to teach department stores, Myer chief executive Bernie Brookes told Sky News yesterday.
"JB Hi-Fi is a tremendous business," he said. "We learn the ability to buy at the right price, we learn the ability to ticket aggressively, we learn the ability to reward people based on their sales and we learn the ability to merchandise and show the product off really well."
"[JB Hi-Fi is] best in their class in the electronics business and we're out there trying to steal their stuff."
First published by Smh.com.au on September 14 2009
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