Selling off the farm, debt, sin donations, ABC Learning, pokies, Cornwall, Rich List, surveys and tweets
August 16, 2010
Dear Mayne Report readers,
With the low key Labor launch now done and dusted we're into the final straight on this election campaign and remain focused on getting as close to 1% of the vote as possible in our anti-pokies Victorian Senate tilt.
Today the focus should partly move to Australia's woeful record in selling off the farm because Canadian company Agrium has launched a hostile $1.50-a-share bid for AWB which values the equity at $1.22 billion.
As the Russians ban grain exports and politicians debate Australia's food security, the idea of our old single desk wheat exporting monopoly becoming the latest part of the farm to go offshore has the potential to enter the campaign debate.
In fact, it has been a big day for selling the farm as Sigma Pharmaceuticals has today announced the $900 million sale of its core pharmaceuticals division to Africa's biggest pharma company, Aspen Group.
The Mayne Report is the only Australian publication which tracks foreign ownership in Australia and we've built up this disturbingly long list of more than 250 foreign companies that generate more than $200 million of revenue in Australia each year.
Here are our two newest entries with the Canadians yet to be added:
Tat Hong Holdings: Singapore listed cranes and heavy equipment supply group which is moving to 100% control of the listed Tutt Bryant Group in 2010. Tutt Bryant generated revenues of $321m in 2008-09 and $240m in 2009-10.
Aspen Group: South African-based pharmaceutical company and Africa's largest which in 2010 agreed to pay $900 million cash for Sigma's pharmaceuticals division.
In terms of Australian companies generating more than $200 million a year offshore, whether from exports or foreign owned operations, we've only been able to come up with 80 examples as you can see from this list.
With the exception of New Zealand, there isn't a major first world economy with a foreign investment record that bad. When it comes to sport, we love to finish in the top 6 of the Olympic medals tally, but if there was an Olympics for business success, we'd be way down. Who is going to mention that disappointing statistic as everyone raves about Australia's strong economic performance during the election campaign?
* If there are any corrections to the foreign owned or offshore Aussie winners list, please email them to Stephen@maynereport.com.
The debt issues continue as farm sales rise again
Surging public state and federal debt is a major issue for Governments across the country and it was interesting to hear Bob Hawke at the Labor launch today quoting RBA governor Glenn Stevens claiming Australia has virtually no public sector debt.
When interviewed by Laurie Oakes on Sunday, Julia Gillard claimed that the nation as a whole has low debt and then quoted a 6% of GDP measure which only refers to federal government debt. Truth be known, Australia has a dreadfully high level of foreign debt, most of which is secured through the big banks and then profitably on-lent as part of almost $1 trillion in outstanding Australian home loans.
But when you combine this high private foreign debt with the extraordinary high level of foreign equity ownership in Australia, it does not paint a very positive picture about the way generations of Australian politicians and business leaders have squandered the nation's wonderful dowry of natural resources and advantages.
If anyone needs assistance on the debt questions, this list tracks all bond and treasury note issues by the Rudd-Gillard Government since it was elected in November 2007. The latest federal bond issue is as follows:
Friday, August 13, 2010: $700m tender of 3 year bonds expiring in December 2013 were sold for an average yield of 4.61% and was over-subscribed 6.3 times.
Foreign investment banking cartel rips off Australia boards raising capital
There are few better example of how dopey Australian boards get ripped off by international players than the $2 billion in fees that were extracted by the investment banking cartel during the great $100 billion capital raising frenzy of 2008 and 2009.
I wrote a seven part series for Fairfax last year on capital raising inequities so it is great to finally have a comprehensive independent analysis by the world's most powerful governance advisor to investors.
Each and every capital raising was different and there will be much debate over this during the coming AGM season.
However, it is important to note that the biggest reason for all these emergency capital raisings was excessive debt in various listed company structures. And when trying to refinance under pressure, we all saw the punitive terms that could be extracted.
I agree with most of the RiskMetrics recommendations on issues such as not requiring a prospectus for a capital raising, forcing disclosure of all fees and requiring recipients of allocations larger than their pro-rata entitlement to be disclosed.
However, it could have gone further and advocated that the maximum placement be cut from 15% to 10% and shortfall bookbuilds should be combined for institutional and retail, rather than run separately as often happens, with retail investors usually getting a lower premium.
Moving David Ryan on from Transurban, next stop Lend Lease
It would have been disappointing to go through the entire election campaign without a mention in The AFR, but the paper was good enough to run this letter today commending the ASA for helping achieve an important accountability outcome in the directors' club.
Cornwall on focus group and leadership changes
Former Fairfax and Crikey cartoonist Mark Cornwall has been having a fun time this election campaign. Here is a collection of his best cartoons and check out some of his latest offerings throughout this election update:
Tracking all the gambling and tobacco donations
We attempted to crank up campaign finance as an issue in our update last Friday and were criticised by some readers for not highlighting pokies industry donations to both sides of politics when bagging Labor in the August 4 update.
In response, we've started to build a comprehensive list of gambling and tobacco industry donations over the past few years.
The Labor Party, to its credit, gave up tobacco donations several years ago but the Coalition has happily pocketed more than $1.5 million over the past 5 years as you can see on the list.
Whilst Labor has certainly enjoyed bigger cash injections from gambling interests over the years, the difference doesn't appear to be enough to offset the funding advantage the Coalition enjoys from Big Tobacco.
When it comes to sin industry donations, it really is a case of a pox on both your houses.
Donate to help fund our Senate campaign
We've been really fortunate to receive about $2500 worth of donations for the Senate campaign so far and anyone else who cares to contribute to the fight against the pokies can simply click on the image below:
Latest in the pokies campaign
Click on the screen shot below to watch a video shot last week after the Herald Sun revealed Woolworths and Carlton supporter Bruce Mathieson were kicking my beloved Tigers out of pokies joint venture in Richmond and redirecting the profits to arch enemy Carlton:
Meanwhile, in what was a total coincidence, a friend invited us to lunch with two other families yesterday at the Matthew Flinders Hotel in Chadstone, which has previously reported the highest pokies revenue per machine in the whole of Victoria.
Paul Bendat's pokieact.org has a special page devoted to inspection notes about this venue which is run by the Woolworths-Mathieson joint venture and specialises in attracting families with young kids.
Our kids thought the play areas were sensational and we could have literally stayed all day losing thousands on the pokies - as doubtless many parents have done over the years.
The City of Monash has been resisting expansion of this venue over the years and they suffer the second highest concentration of kids-focused Woolies-Mathieson pokies venues after Manningham.
Elsewhere, check out this package of our past pokies coverage and this playlist of pokies related videos, including the time we "kidnapped" Nick Xenophon during the 2007 federal election campaign.
Also, check out this 30 second anti-pokies ad made by Paul Bendat last year featuring our daughter Alice, who was 6 at the time:
Cornwall on Abbott
An avalanche of surveys and questionaires
Candidates in most political elections receive questionaires from interest groups seeking to gauge positions because giving voting advice. There have certainly been plenty hit my in-box and we've packaged them up on one web page for analysis. Here's an example of a more obscure request:
Vote for the national computing museum
To 2010 Federal Election Vic Senate Candidate, Stephen Mayne
Please review the attached brief personal survey document - then please REPLY by email to acms@acms.org.au
We intend to provide our members, and interested media, with candidate feedback in the election: (please reply by 17th August, 2010.)
2010 FEDERAL ELECTION SUPPORT FOR AN AUSTRALIAN COMPUTING MUSEUM
[ ] I support the concept of an Australian National Computing Museum
[ ] I will lobby in my electorate for support for an Australian National Computing Museum
[ ] I will get in touch directly with the Australian Computer Museum Society with a proposal
[ ] If elected I will support the funding of a National Computing Museum by the Federal Government
Name of Candidate:
Electorate:
Many Thanks, John GEREMIN, ASTC, ACMS Inc Honorary Treasurer.
The Mayne Report Rich List
BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:
Doug Rowe: sold his metal recycling business Southern Recyling to listed CMA for $40 million in 2006 and was then later fired as CMA CEO and established a new competing firm in 2010 as this story in The Age today revealed.
Cornwall on Latham
Mayne Report RSS Feeds
The Mayne Report now has RSS feeds for you. We have bundled our best articles into a simple and easy delivery for you. Add an RSS feed to your personal reader, iGoogle, MyYahoo, or blog. It's quick and easy to do and means you're always up to date with the latest Mayne Report activity.
Sign up for our campaign and governance Tweets
With more than 2000 followers on Twitter, we are regularly dropping out observations from the federal election campaign, including preference negotiation meetings, forthcoming media and other developments. Click on the image above to get the latest updates from all our activity and here are some recent examples:
1.10pm August 16: Sigma sells pharma ops for $900m to SAfrica's Aspen Group. Woeful Oz record selling farm. Now 300 foreign cos doing $200m a year Down Under.
12.17pm August 16: RBA Governor (and Hawkie at ALP launch) ignoring $200bn debt wracked up by state governments in claiming Oz has virtually no public debt.
11.39am August 16: Abbott splashes $5m on sports facilities in marginal seat of Lindsay. We'd love that in Manningham but Kevin Andrews holds Menzies by 6%.
10.10am August 16: Media establishment blasting Latham but he rated 1.6m so it worked for 60 Mins. Be interesting to see if informal vote jumps on his advice.
7.27am August 16: Risk Metrics report on $100bn in capital raising and retail shaftings got a big run today. Check it out here: http://www.maynereport.com/
7.24am August 16: Latham's old Liverpool council offices destroyed in $20m fire over weekend. He should come to Manningham where 2009 fire caused $10m damage.
11.27am August 15: Latham wasn't that bad. He's employed by our three biggest media companies in Fairfax (AFR), News (Sky) & 9 so he's a media player #loltham
12.04pm August 13: Sent out a big campaign update at 4am this morn tackling Dick Smith, poor donations disclosure and plenty more: http://www.maynereport.com/
6.13pm August 12: Julia Gillard is getting ready for dodgy $5000 a head top end of town fundraiser at Australia's finest club, the RACV in Bourke St Melbourne.
That's all for now.
Do ya best, Stephen Mayne
* To unsubscribe from this email list, click here. If you enjoyed it, tell your friends to sign up here.
With the low key Labor launch now done and dusted we're into the final straight on this election campaign and remain focused on getting as close to 1% of the vote as possible in our anti-pokies Victorian Senate tilt.
Today the focus should partly move to Australia's woeful record in selling off the farm because Canadian company Agrium has launched a hostile $1.50-a-share bid for AWB which values the equity at $1.22 billion.
As the Russians ban grain exports and politicians debate Australia's food security, the idea of our old single desk wheat exporting monopoly becoming the latest part of the farm to go offshore has the potential to enter the campaign debate.
In fact, it has been a big day for selling the farm as Sigma Pharmaceuticals has today announced the $900 million sale of its core pharmaceuticals division to Africa's biggest pharma company, Aspen Group.
The Mayne Report is the only Australian publication which tracks foreign ownership in Australia and we've built up this disturbingly long list of more than 250 foreign companies that generate more than $200 million of revenue in Australia each year.
Here are our two newest entries with the Canadians yet to be added:
Tat Hong Holdings: Singapore listed cranes and heavy equipment supply group which is moving to 100% control of the listed Tutt Bryant Group in 2010. Tutt Bryant generated revenues of $321m in 2008-09 and $240m in 2009-10.
Aspen Group: South African-based pharmaceutical company and Africa's largest which in 2010 agreed to pay $900 million cash for Sigma's pharmaceuticals division.
In terms of Australian companies generating more than $200 million a year offshore, whether from exports or foreign owned operations, we've only been able to come up with 80 examples as you can see from this list.
With the exception of New Zealand, there isn't a major first world economy with a foreign investment record that bad. When it comes to sport, we love to finish in the top 6 of the Olympic medals tally, but if there was an Olympics for business success, we'd be way down. Who is going to mention that disappointing statistic as everyone raves about Australia's strong economic performance during the election campaign?
* If there are any corrections to the foreign owned or offshore Aussie winners list, please email them to Stephen@maynereport.com.
The debt issues continue as farm sales rise again
Surging public state and federal debt is a major issue for Governments across the country and it was interesting to hear Bob Hawke at the Labor launch today quoting RBA governor Glenn Stevens claiming Australia has virtually no public sector debt.
Once again, this ignores the $153.5 billion of outstanding bonds revealed on this Federal Government website and also the near $200 billion of public sector debt directly borrowed by state governments. This latter figure is rising by almost $20 billion a year, largely thanks to the unpopular and fiscally irresponsible Labor governments in Queensland and NSW which Julia Gillard is blaming for her electoral battles.
When interviewed by Laurie Oakes on Sunday, Julia Gillard claimed that the nation as a whole has low debt and then quoted a 6% of GDP measure which only refers to federal government debt. Truth be known, Australia has a dreadfully high level of foreign debt, most of which is secured through the big banks and then profitably on-lent as part of almost $1 trillion in outstanding Australian home loans.
But when you combine this high private foreign debt with the extraordinary high level of foreign equity ownership in Australia, it does not paint a very positive picture about the way generations of Australian politicians and business leaders have squandered the nation's wonderful dowry of natural resources and advantages.
If anyone needs assistance on the debt questions, this list tracks all bond and treasury note issues by the Rudd-Gillard Government since it was elected in November 2007. The latest federal bond issue is as follows:
Friday, August 13, 2010: $700m tender of 3 year bonds expiring in December 2013 were sold for an average yield of 4.61% and was over-subscribed 6.3 times.
Foreign investment banking cartel rips off Australia boards raising capital
There are few better example of how dopey Australian boards get ripped off by international players than the $2 billion in fees that were extracted by the investment banking cartel during the great $100 billion capital raising frenzy of 2008 and 2009.
This 39-page report on Australian capital raisings released today by proxy voting powerhouse RiskMetrics will provide an important historical marker on just how retail investors got ripped off to the tune of billions of dollars.
I wrote a seven part series for Fairfax last year on capital raising inequities so it is great to finally have a comprehensive independent analysis by the world's most powerful governance advisor to investors.
Each and every capital raising was different and there will be much debate over this during the coming AGM season.
However, it is important to note that the biggest reason for all these emergency capital raisings was excessive debt in various listed company structures. And when trying to refinance under pressure, we all saw the punitive terms that could be extracted.
I agree with most of the RiskMetrics recommendations on issues such as not requiring a prospectus for a capital raising, forcing disclosure of all fees and requiring recipients of allocations larger than their pro-rata entitlement to be disclosed.
However, it could have gone further and advocated that the maximum placement be cut from 15% to 10% and shortfall bookbuilds should be combined for institutional and retail, rather than run separately as often happens, with retail investors usually getting a lower premium.
Moving David Ryan on from Transurban, next stop Lend Lease
It would have been disappointing to go through the entire election campaign without a mention in The AFR, but the paper was good enough to run this letter today commending the ASA for helping achieve an important accountability outcome in the directors' club.
Cornwall on focus group and leadership changes
Former Fairfax and Crikey cartoonist Mark Cornwall has been having a fun time this election campaign. Here is a collection of his best cartoons and check out some of his latest offerings throughout this election update:
Tracking all the gambling and tobacco donations
We attempted to crank up campaign finance as an issue in our update last Friday and were criticised by some readers for not highlighting pokies industry donations to both sides of politics when bagging Labor in the August 4 update.
In response, we've started to build a comprehensive list of gambling and tobacco industry donations over the past few years.
The Labor Party, to its credit, gave up tobacco donations several years ago but the Coalition has happily pocketed more than $1.5 million over the past 5 years as you can see on the list.
Whilst Labor has certainly enjoyed bigger cash injections from gambling interests over the years, the difference doesn't appear to be enough to offset the funding advantage the Coalition enjoys from Big Tobacco.
When it comes to sin industry donations, it really is a case of a pox on both your houses.
Donate to help fund our Senate campaign
We've been really fortunate to receive about $2500 worth of donations for the Senate campaign so far and anyone else who cares to contribute to the fight against the pokies can simply click on the image below:
Latest in the pokies campaign
Click on the screen shot below to watch a video shot last week after the Herald Sun revealed Woolworths and Carlton supporter Bruce Mathieson were kicking my beloved Tigers out of pokies joint venture in Richmond and redirecting the profits to arch enemy Carlton:
Meanwhile, in what was a total coincidence, a friend invited us to lunch with two other families yesterday at the Matthew Flinders Hotel in Chadstone, which has previously reported the highest pokies revenue per machine in the whole of Victoria.
Paul Bendat's pokieact.org has a special page devoted to inspection notes about this venue which is run by the Woolworths-Mathieson joint venture and specialises in attracting families with young kids.
Our kids thought the play areas were sensational and we could have literally stayed all day losing thousands on the pokies - as doubtless many parents have done over the years.
The City of Monash has been resisting expansion of this venue over the years and they suffer the second highest concentration of kids-focused Woolies-Mathieson pokies venues after Manningham.
Elsewhere, check out this package of our past pokies coverage and this playlist of pokies related videos, including the time we "kidnapped" Nick Xenophon during the 2007 federal election campaign.
Also, check out this 30 second anti-pokies ad made by Paul Bendat last year featuring our daughter Alice, who was 6 at the time:
Cornwall on Abbott
An avalanche of surveys and questionaires
Candidates in most political elections receive questionaires from interest groups seeking to gauge positions because giving voting advice. There have certainly been plenty hit my in-box and we've packaged them up on one web page for analysis. Here's an example of a more obscure request:
Vote for the national computing museum
To 2010 Federal Election Vic Senate Candidate, Stephen Mayne
Please review the attached brief personal survey document - then please REPLY by email to acms@acms.org.au
We intend to provide our members, and interested media, with candidate feedback in the election: (please reply by 17th August, 2010.)
2010 FEDERAL ELECTION SUPPORT FOR AN AUSTRALIAN COMPUTING MUSEUM
[ ] I support the concept of an Australian National Computing Museum
[ ] I will lobby in my electorate for support for an Australian National Computing Museum
[ ] I will get in touch directly with the Australian Computer Museum Society with a proposal
[ ] If elected I will support the funding of a National Computing Museum by the Federal Government
Name of Candidate:
Electorate:
Many Thanks, John GEREMIN, ASTC, ACMS Inc Honorary Treasurer.
The Mayne Report Rich List
BRW magazine does a great job with its various Australian Rich Lists but we've broadened their efforts to track any Australian who has ever been worth more than $10 million. We've got more than 1400 names with those who've fallen back below $10 million now italicised. Below are our latest new or updated entries:
Doug Rowe: sold his metal recycling business Southern Recyling to listed CMA for $40 million in 2006 and was then later fired as CMA CEO and established a new competing firm in 2010 as this story in The Age today revealed.
Cornwall on Latham
Mayne Report RSS Feeds
The Mayne Report now has RSS feeds for you. We have bundled our best articles into a simple and easy delivery for you. Add an RSS feed to your personal reader, iGoogle, MyYahoo, or blog. It's quick and easy to do and means you're always up to date with the latest Mayne Report activity.
Sign up for our campaign and governance Tweets
With more than 2000 followers on Twitter, we are regularly dropping out observations from the federal election campaign, including preference negotiation meetings, forthcoming media and other developments. Click on the image above to get the latest updates from all our activity and here are some recent examples:
1.10pm August 16: Sigma sells pharma ops for $900m to SAfrica's Aspen Group. Woeful Oz record selling farm. Now 300 foreign cos doing $200m a year Down Under.
12.17pm August 16: RBA Governor (and Hawkie at ALP launch) ignoring $200bn debt wracked up by state governments in claiming Oz has virtually no public debt.
11.39am August 16: Abbott splashes $5m on sports facilities in marginal seat of Lindsay. We'd love that in Manningham but Kevin Andrews holds Menzies by 6%.
10.10am August 16: Media establishment blasting Latham but he rated 1.6m so it worked for 60 Mins. Be interesting to see if informal vote jumps on his advice.
7.27am August 16: Risk Metrics report on $100bn in capital raising and retail shaftings got a big run today. Check it out here: http://www.maynereport.com/
7.24am August 16: Latham's old Liverpool council offices destroyed in $20m fire over weekend. He should come to Manningham where 2009 fire caused $10m damage.
11.27am August 15: Latham wasn't that bad. He's employed by our three biggest media companies in Fairfax (AFR), News (Sky) & 9 so he's a media player #loltham
12.04pm August 13: Sent out a big campaign update at 4am this morn tackling Dick Smith, poor donations disclosure and plenty more: http://www.maynereport.com/
6.13pm August 12: Julia Gillard is getting ready for dodgy $5000 a head top end of town fundraiser at Australia's finest club, the RACV in Bourke St Melbourne.
That's all for now.
Do ya best, Stephen Mayne
* To unsubscribe from this email list, click here. If you enjoyed it, tell your friends to sign up here.