Retail giant Harvey Norman will buy stock in collapsed whitegoods retailer Clive Peeters, saying in a statement it would also purchase plant and equipment along with “know-how, intellectual property rights and systems”.
The company will put down $55 million for the deal, with details of the stores included to be finalised within one week.
“Under the terms of the sale, Harvey Norman has agreed to provide continued employment to the vast majority of very loyal Clive Peeters and Rick Hart employees,” receiver Phil Carter of PPB said in a statement.
Clive Peeters fell into voluntary administration last month. Receivers said many of the stores were not profitable, and subsequently, some are set to close.
Meanwhile, investors affected by the collapse of Storm Financial are now set to file a class action lawsuit against the Commonwealth Bank in the Federal Court.
Levitt Robinson lawyer Stewart Levitt has told Reuters many investors are unhappy with a deal proposed by CB, and want to pursue action against the bank.
Stephanie Carmichael, also from Levitt Robinson, said about 300 affected clients could be affected in the suit.
Shares higher after RSPT deal
The Australian share market has opened slightly higher today due to news the Government has brokered a deal with the mining industry regarding the proposed super profits tax, despite making concessions for business tax cuts.
The benchmark S&P/ASX200 index was up 5.5 points or 0.13% to 4283.7 at 12:.00 AEST, while the Australian dollar was also up slightly US84c.
Westpac shares rose by 1.3% to $21.08, but Commonwealth Bank shares have dropped a further 0.7% to $47.12. NAB lost 0.6% to $22.89 as ANZ fell 0.2% to $21.03.
Meanwhile, publishing giant Fairfax has secured an extension of a $292 million bank facility from April 2011 to April 2014.
The company said in a statement to the Australian Securities Exchange that it had reduced the total facility amount from $1.2 to $1.1 billion.
“This transaction continues to lengthen the debt maturity profile of the company,” the ASX statement said.
As reported by The Australian, the Queensland government is looking to strike a deal with Aluminium Corporation of China.
The paper has reported that premier Anna Bligh said the government had not given up on talks with the company, is hoping to strike a new deal despite the group abandoning plans to develop a mine in Cape York.
“While the current agreement can’t stand, we will continue discussions with a view, hopefully, to signing a new agreement that might have some different characteristics,” Bligh said.
Elsewhere, engineering group Downer EDI has said the potential default of a loan guarantors has not put a $357 million funding facility at risk.
German banks safe from health probe
Sources have told Reuters that no German bank is in danger of a probe into the health of Europe’s biggest lending financial institutions.
“I do not believe that any of the 16 German banks tested could fall under the crucial 6 percent in terms of the Tier 1 ratio,” a senior banking source said.
The source also said that the eight regional wholesale banks aren’t at risk either. The European Committee of Banking Supervisors is now looking into the lending institutions in the 27 countries of the union, in order to determine the risk of each.
It is understood some economists are concerned European banks would not have enough capital to survive another crisis situation.
In the United States, shares have continued to fall due to disappointing data in the manufacturing and labour markets. The Labour Department released new figures showing initial claims for state unemployment benefits grew by 13,000 to 472,000. The market had expected a fall to 452,000.
Both sets of data have increased investors’ fears that the American economic recovery will drag on for years, rather than months. In New York, the Dow Jones industrial average dropped 41.49 points, or 0.42%, to 9,732.53.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
