Nz Dairy Merger
Illawarra Mercury
Friday December 22, 2000
The move to consolidate Australia's dairy industry is likely to gather pace after New Zealand's two biggest dairy companies announced a merger yesterday.
New Zealand Dairy Group and Kiwi Cooperative Dairies Ltd plan to merge, creating a company with $A2.87 billion annual sales and combined assets of $A2.63 billion.
The two groups, the major shareholders in the New Zealand Dairy Board - the industry export arm, said their boards had approved a deal to form a new company known as Global Dairy Co.
NZ Dairy Board will also be integrated into Global Dairy Co under the proposal.
The plan comes amid considerable corporate manoeuvring across the Tasman with NZ Dairy Group only this week increasing its stake in Australia's National Foods to more than 18 per cent.
National Foods spokesman Ian Greenshields said the New Zealand consolidation would increase pressure in the local industry, and might revive the company's plans to acquire further assets.
Rating cut no worry for Village
Cinema and entertainment company Village Roadshow Ltd said yesterday a split rating on its debt would not impact its credit facilities or borrowing costs.
Standard & Poor's yesterday lowered its rating on Village to BB-plus from BBB-minus.
However, rating agency Moody's Investor Services had yesterday confirmed Village's long-term senior unsecured debt rating at Baa3, an investment grade, the company said.
``This change to a split rating will have no effect on the company's credit facilities or borrowing costs," Village said.
In a statement, S&P said that Village's rating outlook was negative.
It said the rating action reflected Village's high debt burden associated with its aggressive cinema screen rollout program, and the lacklustre earnings performance of its cinema exhibition business as a result of soft attendance rates generally.
It also reflected what it called Village's weak performance in some of its new markets where revenues had not adequately covered start-up costs.
© 2000 Illawarra Mercury
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