Britain's GFG Alliance Says Signed Binding Agreement to Buy Australia's Arrium

Marco Green
July 6, 2017

Arrium, spun out of BHP in 2000, collapsed into administration past year and was due to be acquired by a South Korean consortium.

"The acquisition will secure the jobs of over 5500 Australian workers", he said.

A news release issued by KordaMentha Restructuring, which has been overseeing Arrium's assets in receivership, says the sale is subject to review by Arrium's committee of creditors and pertinent regulatory agencies.

This is especially the case for the people of Whyalla, who largely depend upon the company for employment and who have had to endure more than a year of uncertainty since the mining and manufacturing outfit entered into its voluntary administration.

Arrium Administrator Mark Mentha says GFG Alliance, owned by the Gupta family, submitted a modified offer on Tuesday night which was viewed to be superior. It wanted the steel business.

However, both bidders indicated during the sales process that they were prepared to spend more than A$1 billion upgrading Arrium's Whyalla steelworks in South Australia state and on its mini-mills, steel distribution and iron ore mining divisions.

The Korean consortium, led by Newlake Alliance Management and JB Asset Management, and supported by POSCO, was planning to invest $1.4 billion into rejuvenating Arrium's operations, including the Whyalla steelworks.

He GFG Alliance has offered commitments to maintain the Australian workforce and the government expects the new ownership to provide for further growth in the Whyalla operations. "This is about building our nation, it is about building our national infrastructure and we can not be beholden to other countries' steel industries". "We can not be beholden to other countries for our steel industry", he said in a statement.

Federal Treasurer Scott Morrison said he expected to sign off to approve the sale speedily, and said the agreement delivered certainty for workers and the Whyalla community.

Mentha said once the sale was completed KordaMentha would move to the next stages of the administration - finalising returns to creditors, investigating the affairs of the company and reporting to creditors.

The Australian Workers' Union (the major union at the plant among the estimated 5,500 employees) says GFG Alliance has an outstanding worldwide reputation as a good corporate citizen, with a responsible, long-term vision of success.

"We are very surprised by and disappointed with the decision", the source with direct knowledge of the matter said, adding that his group was told of the decision only this morning. "The Australian steel industry has a bright future, and the GFG Alliance has the track record to realise it".

Other reports by Click Lancashire

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