Another weekend and another announcement from Rio Tinto as it continues to blitz the markets with announcements about what it is and isn’t doing.
This time it revealed it was considering listing its North American coal assets on the New York Stock Exchange as Cloud Peak Energy Inc.
Rio said it had filed plans with the US Securities and Exchange Commission for an initial public offering worth up to $US1 billion ($A1.1 billion).
However, Rio Tinto indicated that this was only a preliminary move and that it might not move towards full listing, or pursue a different form of divestment.
A final decision would be made "once these options have been more fully explored," it said in the latest statement.
Rio Tinto said in November it was exploring the possible sale of some or all of its US coal assets to help pay debt used to purchase Canada’s Alcan.
"We are in active discussions with a number of prospective buyers who have expressed strong interest in those coal assets," chief financial officer Guy Elliott said in a statement.
The SEC filing did not reveal the number of shares the company planned to sell or their expected price.
Rio said that Cloud Peak Energy comprised most of the North American coal assets of Rio Tinto Energy America, and is the second largest producer of coal in the U.S. and in the Powder River Basin, operating three of the five largest coal mines in the region.
The Powder River Basin is a major thermal coal producing region in the US. There are around 35 major mining operations spreading through parts of Montana in the West of the country.
Cloud Peak’s Powder River Basin mines in Wyoming and Montana are huge: they supply 11.5% of the US domestic market for coal, generating 6% of America’s electricity.
Cloud Peak would exclude Rio’s Colowyo coal mine in Colorado and the Sweetwater uranium assets, which Rio has already said it would sell Sweetwater.
The lead underwriter for the offering is Credit Suisse Securities (USA) LLC.
BHP Billiton shares lost four cents to $37.15 in Australia on Friday, while takeover target Rio Tinto shares added $1.00 to $116.00.
Westpac shares gained more than 1% Friday after it revealed it had escaped the worst of the credit crunch and was looking for a 6%-8% rise in earnings for the full year.
It’s now the country’s second largest bank by market capitalisation after the Commonwealth, which reports its full 2008 financial year results this Wednesday.
CBA shares eased on Friday ahead of the result and investors will continue to be uncertain until they see the actual figures from the bank. Expect a solid profit rise, even after a rise in bad debts.
The CBA is a big lender to the Centro Properties group which is now in break up mode to try and restructure to repay debts.
Westpac said in a statement on Friday that full-year cash profit, which excludes income from derivatives trading, will increase up to 8% in the year to September 30, on revenue growth of up to 9%.
That’s in stark contrast to the lower profits expected from the ANZ and the National after both announced big write-downs.
Westpac said it will maintain a conservative risk profile and is on target to complete its planned takeover of St. George Bank which updates the market tomorrow.
Westpac CEO, Gail Kelly said the bank was continuing to do well despite the slowing growth now being reported across the economy.
"Managing risk remains a priority for us and we are maintaining our strong lending and credit risk disciplines," she said in a statement.
"We are not distracted by problems in our credit portfolio, enabling to us concentrate on our strategic agenda."
And Telecom New Zealand, the country’s biggest Telco has forecast a second year of declining profits after full year earnings dropped 16% to $NZ713 million in the year to June 30.
Profit could drop by up to 30% this year as competition intensifies from the likes of Telstra and Vodafone.
The once dominant Telco is having to build new new broadband and mobile networks and cut prices to meet the rising competition from its rivals.
Telecom shares dropped more than 10% on Friday, the largest one day fall in 11 years.
The company says 2009 earnings will fall to between NZ$500 million and NZ$540 million in the 2009 year.
The company’s dividend payments will fall to 6 NZc a share in the first three quarters of fiscal 2009, compared with 7c a year earlier. All 2009 dividends will be paid without tax credits.
Telecom plans to increase capital spending to NZ$1.1 billion this year to finance the new networks.
