South Australian steelmaker and mining group Arrium has been sold to GFG Alliance, an international group of businesses founded and owned by the Gupta Family in the UK.
KordaMentha, the administrators for Arrium, says the sale is subject to approval by the Arrium Committee of Creditors, which meets next week, and the Foreign Investment Review Board.
“Subject to those approvals this is a great result for Arrium employees and the city and people of Whyalla,” says administrator Mark Mentha.
“It ensures their future and ends 15 months of uncertainty.”
Mentha says GFG Alliance submitted a modified offer for the Arrium businesses on Tuesday night. Details haven’t been released and the sale price is “confidential”.
“Taking all factors into consideration, including the timeframes required to complete a sale, KordaMentha and our sale advisers Morgan Stanley decided that GFG was an option superior to the conditional offer of the Korean alliance with whom we were negotiating,” says Mentha.
He says the successful sale is a tremendous credit to all stakeholders who worked so hard to give the group the best possible chance of a future.
“This includes the employees, unions, management, local suppliers, the townspeople of Whyalla and three levels of government,” he says.
“They have stuck solid through a torrid period including gyrating ore prices, big increases in our coking coal prices and general economic uncertainty.
“Employees took a wage cut, management took a haircut, suppliers agreed to new terms and governments chipped in with funds and loan guarantees. This is a wonderful example of how an important industry can be saved if everyone pulls in the same direction.”
In April last year Arrium went into voluntary administration, a victim of falling iron ore prices and a steel glut caused by overproduction in China.
The iron ore miner and steel producer couldn’t get a deal with its lenders — the banks and note holders — to restructure debt of more than $2 billion.