Steel and iron ore business Arrium will be on the market in late-July and most of the restructure and sale is expected to be completed by the end of the year, says the company’s administrators.
AAP and others report that administrators KordaMentha have presented a proposal to state and federal governments for co-investment in Arrium’s loss-making Whyalla steelworks.
SA premier Jay Weatherill said any co-investment strategy to return the mill to viability could amount to hundreds of millions of dollars, reports The Advertiser. It should not be used to pump the company up for sale, he said.
Assistance would be discussed with the federal government and opposition in the coming days.
“But given that both parties are now in caretaker mode, it will require a bipartisan response and we expect to have our position finalised soon,” ABC’s PM reports him as saying.
Upgrades at the Whyalla site are badly needed, said the administrator.
“The mill has been under-invested in for some period of time,” Mark Metha of KordaMentha told the ABC.
“The capex [capital expenditure] and maintenance on the plant has probably been about 40 per cent of depreciation so it’s been in decline for a long period of time. I think most people understand that.”
Baillieu Hoist chief economist Darryl Gobbett said the company was likely to be carved up and sold, and it was vital the steelmaking component stay Australian-owned.
“Strategically we need this capability, but we need to bring Arrium’s offerings up the value chain and that will require public sector money,” he told The Advertiser.
The Arrium group of companies went into voluntary administration in April. Its debts total more than $4 billion.