Jobs at Whyalla steelworks are under threat again, following the company’s bankers rejecting a bailout proposal and workers divided on a pay cut.
Fairfax reports that a $US 927 million proposal from GSO Capital – the credit arm of Blackstone – was nearly unanimously rejected by the iron ore and steel producer yesterday.
Arrium currently owes roughly $2 billion andannounced on February 17 it was considering putting the Whyalla steelworks and its iron ore operations in care and maintenance.
Its bankers include over 20 foreign banks and Australia’s “big four”. The company was put on a trading half yesterday.
It employs about 1,100 at the Whyalla steelworks, and the company employs roughly a tenth of the city.
The South Australian government is requesting the banks continue to support the troubled company, and treasurer Tom Koustantonis said it would be “ridiculous” for Australia to end up in a position where it would have to import steel.
“There is a lot at stake here for South Australia an indeed the nation,” In Daily reports him as saying.
“Our nation’s sovereignty relies on Australia continuing to produce its own steel.”
Votes by Australian Workers Union workers were divided on an effective pay cut of 13 per cent. Steelworks employees voted in favour and miners rejected it.
Arrium Mining’s executive general manager Matt Reed called a result of 42 per cent support “very disappointing”.