Administrator KordaMentha updates Whyalla Steelworks creditors and workers
An update on the administration of the Whyalla Steelworks in South Australia today has informed workers and creditors that $100 million has been spent by administrator KordaMentha so far.
The South Australian government forced the steelworks into administration in February after the business, owned by GFG Alliance, failed to pay tens of millions of dollars in royalty payments to the government and millions in unpaid bills to creditors.
KordaMentha partner Sebastian Hams said the $100 million had been spent on restoring inventory, sustaining capital expenditure and improving the site's safety.
He said site visits from prospective buyers were underway.
As for taking on the debts of Whyalla Ports Pty Ltd, Mr Hams said the administration was over One Steel Manufacturing Pty Ltd only.
"[Whyalla Ports] is not in administration, and therefore I should assume that company is solvent and that's going to pay its debts as and when they fall due."
Mr Hams said the blast furnace at Whyalla was now operating at its full capacity of 2,800 tonnes a day, "which means it's now running in a stable environment", but its life span was uncertain.
"The new buyer will come in with new technology and a different mindset, so it's entirely dependent on what a new buyer wants to do," he said.
Mr Hams would not reveal how much the loss in daily profit had been reduced.
"The loss pre-appointment was running at about $1.5 billion a day," he said.
"It moves on a daily basis, but it's significantly less.
"We're really focused on seeking a buyer that is a manufacturer who understands steel … and understands the value in the mines."
The state government moved to clarify Whyalla port's ownership by introducing amendments to legislation in parliament on Tuesday.
Premier Peter Malinauskas told the parliament that the government would introduce amendments to the Whyalla Steelworks Act to show the port was owned by former steelworks owner OneSteel Manufacturing.
One creditor who wished to remain anonymous told the ABC they were owed $100,000 to $200,000 by Whyalla Steelworks, with 10 to 15 per cent of this being from the port alone.
They said they feared they may never receive the money owed to them from Whyalla Ports Pty Ltd due to the dispute over its ownership.
"I don't think it's going to happen unless we put a letter of demand in to GFG, Sanjeev Gupta and his stakeholders," they said.
"We're going through legal advice now."
Another creditor who did not want to be identified said they were owed $20,000, outstanding for around seven months past the due date of payment.
They said they did not realise Whyalla Ports was a separate company until a few weeks ago.
"If we had known that, we probably would have done things a little bit differently in regards to the Whyalla Ports," they said.
"A bit disappointing we had to find out the hard way."
Steelworks employee Sue Kelly said the safety of the plant had been seriously lacking under GFG Alliance, but it had got "a lot better" since KordaMentha took over.
"Even to the degree of our … PPE [personal protective equipment]," Ms Kelly said.
Australian Workers Union local branch organiser Shane Karger said it was "fantastic to have the real situation put out to the people".
"To develop a relationship that we have now with KordaMentha that is open and honest is definitely something that we would like to maintain going forward with new buyers," he said.
"We'd hate to get to a situation where it's all cloak and dagger again, it's all secrets behind closed doors, and eight years down the track we're 'oh no, the steelworks is in trouble again'."
GFG Alliance has been contacted for comment.
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