Oceania

The Australian dollar tumbled to its weakest level since the financial crisis as investors continued to weigh the impact of the coronavirus on economic growth in China, Australia’s biggest trading partner, the Financial Times reported. The currency, typically regarded as a proxy for Chinese economic growth, fell as much as 1 per cent to $0.6662 in New York trade on Friday morning, the lowest level against the greenback since March 2009.

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Natural disasters are unpredictable events with broadly predictable results: a destruction of property and wealth, but no lasting impact on economic growth, The Wall Street Journal reported. Australia’s wildfires, which have ravaged more than 26,000 square miles of land and killed at least 30 people, will be the latest big test of that view. At stake is the country’s 28-year run without a recession—the longest ongoing streak in the developed world.

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Australia’s Downer EDI cut its annual profit forecast on Thursday amid a surge in costs at its loss-making construction contracts, sending the company’s shares sharply lower to mark their worst session in nearly a decade, Reuters reported. The revised outlook comes amid weak global business investment and as Australia’s economy stutters along with sluggish wage growth and high consumer debt.

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Audit group KPMG said on Wednesday Australia’s McWilliams Wines Group had gone into voluntary administration and that it was seeking capital or a buyer for the winemaker, which has been struggling to pay creditors amid changing drinking trends, Reuters reported. The decision comes in the wake of deadly bush fires that have engulfed large swathes of Australia, especially the state of New South Wales where the company’s vineyards are located. McWilliams Wine was not immediately available for comment on whether the fires are a contributing factor.

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Whichever way you look at it, it’s been an annus horribilis for many big name retailers. In 2019, we witnessed the collapse of a slew of Aussie favourites, with some international players also folding in recent months, news.com.au reported. So where did it all go wrong for these iconic companies – and what does 2020 hold for our struggling retail sector? According to Queensland University of Technology retail expert Dr Gary Mortimer, there are two main factors that caused the downfall of many businesses in 2019 – changing consumer tastes and “overcrowded, hyper-competitive markets”.

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Administrators plan to close 40 per cent of Harris Scarfe’s national store network in a bold plan to make the ailing department store viable for sale,The Weekly Times reported. Deloitte Restructuring Services sent a flyer to prospective buyers outlining a dramatic restructure, according to The Australian Financial Review, which included shutting 27 of the 66 stores. The closures will mainly focus on the less-profitable sites in New South Wales, Queensland and Western Australia.

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The creditors of Catalist-listed lithium miner Alita Resources have approved a deed of company arrangement (DOCA) from a Chinese firm for the acquisition of Alita's assets, the Business Times reported. China Hydrogen Energy (CHE) and its Australian subsidiary Liatam Mining had proposed the DOCA this month. CHE is a special purpose vehicle for an unidentified Chinese party. In Australia, a DOCA is a rescue plan that allows a company to restructure its debt and avoid insolvency.

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Tamarind Taranaki was placed in liquidation at a watershed meeting with creditors this morning, The New Zealand Herald reported. The company, which operates the Tui oil fields ran into debts when a drilling campaign in September went over budget and was unsuccessful. Malaysian-owned Tamarind Taranaki reportedly has debts of around $350 million, including a US$100 million claim from the New Zealand Government for the decommissioning costs of closing and cleaning up the fields.

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Eric Watson's Cullen Group In Liquidation

Eric Watson's Cullen Group has been moved into liquidation by court order, meaning it might no longer fight a $112 million tax judgment against it. The company was moved into the hands of KPMG liquidator Vivian Fatupaito earlier this week, by court appointment, The New Zealand Herald reported. The Inland Revenue Department had been pursuing the company's liquidation after Justice Matthew Palmer ruled in March this year that Cullen Group was part of Watson's "web of entities" designed to avoid paying non-resident withholding tax.

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Australia’s mid-year budget update showed economic reality is starting to bear down on the government’s finances, Bloomberg News reported. Treasury lowered its forecast surplus for the 12 months through June 2020 to A$5 billion ($3.4 billion) from April’s budget estimate of A$7.1 billion as it scaled back estimated tax revenues, according to the Mid-Year Economic and Fiscal Outlook released in Canberra on Monday. It also predicted narrower surpluses for the following three fiscal years.
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