Australian Market Report of June 10, 2010: Magellan's (ASX:MGN) Purchase Approved by FIRB

The Australian market shrugged off Wall Street's negative lead and opened firmer this morning on optimism over US economy. Financials and mining stocks led the market rise. The benchmark S&P/ASX200 index gained 0.58 per cent, while All Ordinaries rose 0.71 per cent in early trade.

Yesterday the local market ended with little change. Shares were traded in negative territory in most of the session; however, China's upbeat exports data supported the Australian shares towards the close.

Economics data to be released on Thursday include the Australian Bureau of Statistics labour force report for May, Melbourne Institute survey of consumer inflationary expectations and unemployment expectations. The Reserve Bank of Australia's bulletin for the June quarter is also due.

Company News

Magellan Petroleum Corporation (ASX:MGN) (NASDAQ:MPET) said Foreign Investment Review Board (FIRB) has approved its acquisition of Santos Limited's (ASX:STO) 40 per cent interest in the Evans Shoal natural gas field, located in the Bonaparte Basin offshore Northern Australia. The acquisition is targeted for completion in late 2010. Magellan plans to advance its work plan, as endorsed by the joint venture partners, by obtaining additional funding after completing evaluation of the various funding options available. The company expects to shortly conclude a definitive purchase and sale agreement for the sale of its common stock to strategic investor, Young Energy Prize.

Viterra (ASX:VTA) (TSE:VT) said its consolidated sales and other operating revenues increased year-to-date to C$3.8 billion, up 28.2 per cent relative to the first six months of fiscal 2009. A strong performance from North American agri-products operations, combined with new contributions from Australia, led to significant increases in both revenue and gross profit for first half. For the first six months of this fiscal year, earnings were CAD29.1 million, compared to a net loss of C$6.6 million in the same period a year earlier. Chief executive Mayo Schmidt said fiscal 2011 is shaping up well, given the initial outlook for healthy crop production around the world.

Duet Group Ltd's (ASX:DUE) 79.9% owned Victorian gas distribution company, Multinet Gas, has reached an agreement with US bond investors to raise US$185 million through a private placement of five year senior unsecured notes. The transaction includes the execution of cross currency interest rate swaps to convert the funds to A$230 million. The bonds have been issued by Energy Partnership Gas (EPG), which is Multinet's funding vehicle and a wholly owned subsidiary. The funds will be invested by EPG before being repaying debt which matures in July 2011. Multinet also says the interest rate margin achieved was attractive and reflected the current strong demand for investment grade utility issuers.


Related Companies

Viterra Inc.
        

Santos Limited
        

Magellan Petroleum Corporation.