Greensill Crisis Reaches Whyalla Steelworks in Australia
Australian Financial Review reported that as unions expressed concern about the potential fallout from the troubles of one of GFG’s main financiers Greensill
Australian Financial Review reported that as unions expressed concern about the potential fallout from the troubles of one of GFG’s main financiers Greensill Capital, Mr Sanjeev Gupta’s GFG Alliance says the Whyalla steelworks and associated iron ore mining operations are back in the black after years of losses. GFG Alliance said “Our integrated operations at Whyalla, which include the mining assets and the steelworks, are in the black. The transition program we’ve implemented, including operating all assets at a higher capacity and improvements to both mining and the steelworks, coupled with the strong recovery in the Australian steel and mining markets, have resulted in strong improvements to underlying earnings year on year.”
AFR report said “Court documents lodged in the Supreme Court of NSW by lawyers for Greensill, one of the main financiers to GFG, warned of about 7000 jobs being at risk in Australia if credit insurance policies were blocked from being renewed. The court documents stated the domino effect in turn, may trigger further adverse consequences on third parties, including the employees of Greensill’s clients.”
Australian Workers Union state secretary Mr Peter Lamps said the union is concerned about the potential fallout from the Greensill issues on GFG Alliance and its operations. He said “The union is always concerned at any time when these circumstances arise. The union is committed to, as always, work with the parties to ensure our members’ livelihoods aren’t impacted.”
Mr Gupta bought the former Arrium business in Australia from administrators Mr KordaMentha for about AUD 700 million in 2017, giving him ownership of the Whyalla steelworks and the assets which now form Infrabuild. The steelworks employs about 1500 people and the town of 22,000 people relies heavily on it as a major employer.