tigerpie wrote:Jimmy_041 wrote:tigerpie wrote:What the outcome of a town meeting about the whyalla steelworks is going to be.
If the amount of monies owing is as big as it is then this could get real ugly real quick.
What's the goss here @tigerpie?
I cant find anything
Me either.
But holy shit this guy owes some cash.
6 million in royalties to the barngarla people is just one debt and that's past due, amongst others.
Here you go - found this in AFR
Koutsantonis giving business advice............Effectively says you should continue to trade whilst insolvent - WAFDH
GFG Alliance’s bills mount as the Whyalla Steelworks begins to strain
Simon Evans and Elouise Fowler
Sep 17, 2024 – 5.00am
The Whyalla Steelworks has begun falling behind on payments to suppliers at the same time as it cuts staff and faces falling steel prices, in a sign that financial pressure is building on the industrial empire put together by British businessman Sanjeev Gupta.
Several suppliers have issued default notices to companies owned by Mr Gupta’s GFG Alliance, the owner of the steelworks north of Adelaide, which is also on the hook for unpaid native title royalties. A $6.5 million bill, related to a claim over the company’s iron ore mine near the steelworks, will finally be settled with monthly payments of $204,000 to native titleholders until the middle of next year.
Despite the financial strain – GFG Alliance has been struggling for years to repay massive debts owed to the creditors of collapsed Australian financier Greensill – Mr Gupta is the new owner of a Sydney harbourside apartment and a berth to house his yacht, The Australian Financial Review’s Rear Window column reported this month.
The collapse of Greensill, which lent GFG Alliance around $US5 billion ($7.4 billion), was a major reason for Credit Suisse’s difficulties last year, which ultimately led to its takeover by Swiss rival UBS. Greensill companies have previously pointed to the GFG Alliance and its debts, which had “started to default”, for its failure.
According to CreditorWatch, which monitors credit scores and defaults, GFG Alliance’s Australian subsidiary One Steel has in the last month failed to pay at least two suppliers including Fire Rescue Safety and SGS, which provides site inspection services.
South Australia’s Mining Minister, Tom Koutsantonis, confirmed on Monday that there were “creditors who are waiting for money”. But, Mr Koutsantonis added, some creditors were being paid and it was important not to “create a panic”.
“You’re not doing the creditors any good if the steelworks falls over and goes into administration,” he said. “The first people who miss out are the creditors. The best thing to do is to keep this thing operating.”
A GFG Alliance spokeswoman said the company was working through a downturn in steel prices. “The steel industry globally is going through an extended downturn, with a slowdown in demand and severe pressure from overseas suppliers,” she said.
An extended property meltdown in China has created economic uncertainties in the major export market, leading to lower demand for steel. At the same time, Beijing is pushing steel to be exported, leading to trade sanctions, including from India. ArcelorMittal, one of the world’s biggest steel producers, last month said it expected a big slowdown in growth over the next 12 months.
GFG Alliance’s Whyalla Steelworks has already cut dozens of jobs, and is cutting costs including on maintenance at the plant. It has also grappled with a near four-month shutdown at the plant, which only returned to production in early July, caused by a cracked blast furnace. More job losses are coming from a nearby mine in the Middleback Ranges owned by Mr Gupta, which supplies the steelworks with iron ore.
Mr Gupta acquired the steelworks in 2017, along with other assets, for about $700 million after the collapse of Arrium, once part of BHP.
Many in Whyalla, an industrial centre and a major regional town in SA, are increasingly sceptical about the survival of the steelworks after GFG Alliance announced in May a two-year delay for a proposed $500 million upgrade to the steelworks.
But Whyalla mayor Phill Stone said there was no choice but to back GFG Alliance. “We have to put our faith and trust that they are still working to a plan,” he said. “You couldn’t get it at a worse time if you planned it. Some of these job losses were in the wind.”
The faults at the plant and downturn in steel prices compound an adverse finding by law firm Norman Waterhouse which concluded GFG Alliance owed the Barngarla Determination Aboriginal Corporation some $6.5 million in royalties back payments.
The law firm found there was “an underpayment of royalties” in the decade to June last year. In November, GFG Alliance’s One Steel subsidiary agreed to pay an upfront $1.6 million, followed by monthly payments totalling $4.9 million.
Support columns for a highway under construction in Jinan, China. Fewer construction projects in the country has dented demand for steel, and with it, iron ore.
Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com
