SA Government puts Whyalla Steelworks under administration
The South Australian Government has announced it is placing Whyalla Steelworks’ owner into administration. GFG is no longer running the steelworks.
The state has appointed KordaMentha as an administrator of OneSteel Manufacturing Pty Ltd under section 436C of the Corporations Act 2001. OneSteel is part of the GFG corporate group and is the legal entity that owns and operates the Whyalla steelworks and associated mines.
During this period of administration, the administrator investigates options including sale of the business, with the ambition of delivering the best outcome for creditors and continued operation of the steelworks.
The administrators will be able to trade on and pay all debts incurred during the period of administration. This means that going forward, workers and contractors will be paid.
KordaMentha has advised the state government it intends to appoint an experienced special adviser to assist the administration and is engaging with parties including BlueScope.
The state government took the decision to place OneSteel in administration after losing confidence in the financial capability of GFG to pay its bills as and when they fall due. The government has equally lost confidence in GFG’s ability to secure funding needed for the ongoing operation of the steelworks.
The SA Government says it has received expert advice from its Steel Taskforce that a continuation of the status quo and a lack of investment risks the steelworks deteriorating to the point where creditors will be impacted even further and where it will be difficult, if not impossible to turn the operation around.
The appointment of the administrator was facilitated by an urgent and minor change to the Whyalla Steel Works Act 1958 which passed state Parliament this morning.
This amendment makes GFG’s existing debts to the state government apply as a charge across all, rather than some, of the real property of OneSteel, and makes them readily enforceable.
“For months, my government has been carefully planning a strategy to address the challenges unfolding at the Whyalla Steelworks,” said Premier Peter Malinauskas. “Throughout that period, we gave GFG every opportunity to make good on its promises and to bring creditors back into terms. It has failed to do so. So today, we have acted.
“This is a significant step, and one we do not take lightly,” he added. “But it is a necessary one to secure the long-term future of Whyalla.
“Importantly, it’s not just the Steelworks itself — it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated and whose livelihoods are at stake. Only an intervention of this nature will protect the steelworks and its creditors.”
The SA Government says that Whyalla is critical to sovereign Australian steel. It’s one of only two Australian steelworks, produces 75% of Australian structural steel and is the only domestic producer of steel long products.
Steel from Whyalla is how Australia can build and maintain its infrastructure — whether it’s railways, high-rise towers, housing, wind farms, transmission, bridges, defence assets or hospitals. Whyalla steel is present in big infrastructure projects, from Optus Stadium in Perth to the Western Sydney Airport terminal and rail link, to the Cross River Rail project in Brisbane.
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