Australian Law Makers Express Solidarity with WhyallaSteel Workers
The Guardian reported that the Australian government has raised the prospect of providing finance to save steelworks owned by Mr Sanjeev Gupta, whose
The Guardian reported that the Australian government has raised the prospect of providing finance to save steelworks owned by Mr Sanjeev Gupta, whose business empire is facing a multibillion-dollar debt crisis. Australia’s Finance Minister Mr Simon Birmingham told the ABC radio station “Governments are monitoring this situation very closely and indeed doing the type of contingency thinking and planning that would be prudent in these sorts of circumstances. Financing options provided the last time the steelworks moved into administration were being considered. Our government continues just to make sure we are looking at those examples from the past and being mindful of how we could respond if we need to. Australia’s sovereign capability to produce steel is one factor in the government’s considerations. The Whyalla community should know that everybody is doing all the work they should be doing to make sure that we maintain that steelmaking capability for Australia,”
The Epoch Times reported that several Australian law makers have shown solidarity with the owners of Whyalla Steelworks in South Australia, where thousands of are looking to the federal government for assurance as the future remains uncertain. South Australian Treasurer Mr Rob Lucas tried to reassure OneSteel employees, saying they shouldn’t jump to any alarmist conclusions as the legal action had just begun. He told ABC “GFG has continued to ensure the market, and the government, that they are confident they’re going to be able to manage a refinancing of their relationship they’ve got with Greensill. We can only take them at their word at this particular stage, and we’ll have to wait and see the results of their attempted renegotiation of finance. The company had not sought further financial assistance from the state government, as GFG had said they were confident of refinancing.”
South Australian MP Mr Rowan Ramsey said it was too early to panic, noting that GFG had recently announced the strong performance and positive cash flows of their Australian businesses. He told “We need people to stay calm as we work our way through the issues. I can assure the residents and businesses of Whyalla we are watching the space closely.”
Whyalla Mayor Ms Clare McLaughlin also called for calm in the community, telling Whyalla News that GFG had assured the local council that it would vigorously defend the legal proceedings and face the legal challenge head-on. Ms McLaughlin said “These are all encouraging signs, so we implore the community to remain positive as this process plays out and to not jump to conclusions based on speculation.”
Investment bank Credit Suisse has launched legal action that could potentially put the Whyalla steel mill and other steel assets owned by billionaire tycoon Mr Sanjeev Gupta into liquidation. Citigroup has filed an application on behalf of Credit Suisse in the New South Wales Supreme Court seeking to wind up two entities that are a part of Mr Gupta’s Australian business empire over debts associated with failed financier Greensill Capital. There are two defendants, the first is OneSteel Manufacturing Pty Ltd (trading as Liberty Primary Steel) and the second is Tahmoor Coal Pty Ltd. The wind up application includes consent from McGrathNicol for it to act as liquidator. A first hearing for the application will be on May 6. If successful the entities that own the Whyalla and the Tahmoor coal asset will fall into liquidation, an outcome feared by the unions covering more than 6,000 workers across both businesses.
GFG Alliance, after the court action by Credit Suisse, said that a proposed refinancing of the Whyalla steelworks and Tahmoor coal operations in NSW is well advanced, and the proposals being worked through would be enough to pay all creditors to those two businesses. GFG said in a statement “GFG Alliance’s Australian Mining and Primary Steel business, which includes Onesteel Manufacturing Pty Ltd and Tahmoor Coal Pty Ltd confirms it has received multiple offers of finance from large investment funds and is in advanced due diligence. The term sheets as currently proposed would provide enough cash to repay the creditors of MPS. GFG Alliance expects the confirmatory due diligence to be complete within weeks before a final offer is accepted.”