GFG puts Whyalla port company into administration after government intervention
GFG Alliance has placed its subsidiary company which formerly operated the Whyalla port into administration, after the state government intervened in an ownership dispute over the facility.
The company, Whyalla Ports Pty Ltd, was embroiled in a Federal Court case launched by Whyalla steelworks administrators KordaMentha, which wants control of the port so it can sell the steelworks as an integrated asset.
The state government recently intervened by introducing law changes to "clarify" that the port is owned by OneSteel Manufacturing — the GFG subsidiary that operated the steelworks before being tipped into administration — rather than Whyalla Ports Pty Ltd.
In a statement released on Saturday, a GFG Alliance spokesperson said the law change left it with "no option but to place Whyalla Ports Pty Ltd into voluntary administration".
The spokesperson added that the company was "confident" the Federal Court case would have been decided in its favour "had the Australian legal system been allowed to determine the matter in the usual way".
"Whyalla Ports revenue has been severely impacted by the actions of the South Australian Government," the spokesperson said.
"Whyalla Ports Pty Ltd is unable to engage in any commercial activity after the termination of its lease and the seizure of assets by the South Australian Government at the request of the Administrators.
"These actions have resulted in a complete stop in all revenue streams and therefore no ability to pay creditors."
KordaMentha has continued to operate the port throughout the ownership dispute, while the state government said GFG's decision has no impact on the facility's operation.
"The port continues to operate as usual," a state government spokesperson said.
"The voluntary administration of any GFG operation is a matter for GFG."
GFG claims that the administrators of the steelworks have "continued to use Whyalla Ports Pty infrastructure on land leased by Whyalla Ports without effecting payment for use of the land or infrastructure worth millions of dollars".
But the state government claims that ministerial consent was required to lease the port and "this consent was neither sought nor granted".
"The Government had complete confidence in the legal action undertaken by KordaMentha, however the legislative changes clarify the consequence of failure to gain consent and will ensure similar action will not be necessary in future," the government spokesperson said.
KordaMentha sought to withdraw its legal claim against Whyalla Ports at a Federal Court hearing on Tuesday, saying the government's law changes had achieved what they were seeking.
But the court also heard a cross-claim by the defendant, Whyalla Ports, would continue, with their lawyers telling the court there is still a dispute over the ownership of some assets.
The matter is expected to go to trial in August.
GFG said on Saturday that its decision to appoint administrators for Whyalla Ports will have "no operational impact on the rest of GFG Alliance".
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