Credit Suisse Files Winding Up Petition for Whyalla Steel Mill
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Credit Suisse Files Winding Up Petition for Whyalla Steel Mill

The Sydney Morning Herald reported that investment bank Credit Suisse has launched legal action that could potentially put the Whyalla steel mill and other

The Sydney Morning Herald reported that 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.

Australian Financial Review separately reported that 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.”

It is understood the refinancing proposals are for a $400 million-plus facility which had previously been provided by the now collapsed Greensill Capital.

The NSW Supreme Court action follows a similar winding up application in London on behalf of Credit Suisse that was also filed by Citigroup. Citigroup is the trustee of Greensill’s bonds which were part of Greensill’s complex financing arrangements with Credit Suisse.

OneSteel Manufacturing operates the Whyalla steelworks that employs about 1500 people and is the lifeblood of the regional town in South Australia of 22,000 people, which is about 380 kilometres north of Adelaide. The steelworks was acquired by Mr Gupta in mid-2017, rescuing the collapsed Arrium Ltd business, which had been in administration for 16 months under KordaMentha. Mr Gupta also bought the structural steel operations on the east coast of Australia, now known as Infrabuild, in the same transaction, giving him ownership of two mini steel mills in outer Sydney and Melbourne, a national steel recycling business and a series of structural steel distribution outlets.

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