Economy

Brits Buy Failing Arrium Steel

Brits Buy Failing Arrium Steel”

A rival bid by a Korean private equity firm, led by Newlake Alliance and JB Asset Management, and backed by technology from the steelmaking giant Posco, was selected as the preferred bid last month.

South Australian Premier Jay Weatherill said he had spoken to businessman Sanjeev Gupta this morning to offer his congratulations and "he reaffirmed his strong commitment to the long-term future of the Whyalla operations".

The sale is subject to approval by Arrium's creditors and the Foreign Investment Review Board (FIRB).

The steelmaker was placed into voluntary administration in April past year, with debts of more than $4 billion.

However, GFG Alliance, which is owned by Britain's Gupta family and includes the Liberty House metals business, modified its offer on Tuesday night to sway KordaMentha in its direction.

Describing the outcome as "a great result for Arrium Australia employees and the city and people of Whyalla", deed administrator Mark Mentha said the deal ensures their future after more than a year of uncertainty since the steel maker entered voluntary administration in 2016 with debts of more than $4 billion.

Liberty House Group had offered to buy Arrium and keep Whyalla operational without any federal funding assistance.

"Looking forward, we will continue to explore opportunities to further grow our presence in Australia in adjacent and complementary industries, including renewable energy, metals and mining", he said yesterday.

Treasurer Scott Morrrison said a future for the jobs of workers in Whyalla has been secured today by governments working together. "This is about building our nation, about building our national infrastructure".

Mentha said once the sale was completed KordaMentha would move to the next stages of the administration - finalising returns to creditors, investigating the affairs of the company and reporting to creditors.

Gupta said he had a vision to create a vertically integrated and sustainable industrial business that encompassed mining, metal recycling, primary metal production, engineering and distribution.

The Australian Workers' Union (the major union at the plant among the estimated 5,500 employees) says GFG Alliance has an outstanding global reputation as a good corporate citizen, with a responsible, long-term vision of success.

"We are particularly excited by the opportunity for the Whyalla Steelworks to directly supply intermediate steel products to our United Kingdom rolling mills that are now sourced from third parties".

"They have invested strongly in heavy industry in Europe and the United Kingdom and it is this mindset they will bring to Australia", AWU national secretary Daniel Walton said.



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