Unhappy banks urged to cooperate with Arrium administration

Bankers for Arrium, which entered voluntary administration yesterday, have been urged by the South Australian government not to take legal action.

The steel and iron ore business announced yesterday morning that it had appointed Grant Thornton as administrators, which has been interpreted as an act of defiance against the banks. Arrium owes $2.8 billion to lenders, with the “big four” banks owed a billion dollars.

The banks wanted McGrathNicol as administrators, reports Fairfax, which would see them placed higher up in the list of creditors.

SA Treasurer Tom Koutsantonis advised the banks not to start legal action.

“If they want the Australian Government and the governments of Australia to invest in Arrium to try to help the banks get some of their money back on this massive amount of debt they have lent to Arrium, they need to cooperate,” he told the ABC.

“If they start off by being aggressive, then rushing off to court delaying the stabilisation of this company that will upset every treasurer in the country.”

A creditors meeting will be held April 19.

The jobs of 7,000 workers across Australia are in question, with about 3,000  of these in NSW and 1,000 in Victoria and Queensland.

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