First phase of Whyalla steelworks sale passes

The deadline passed on Friday for the indicative bidding stage of the sale of Whyalla steelworks, which was put into administration earlier this year.

KordaMentha put out a statement last Thursday saying that the duration was uncertain “and will be highly dependent on the nature of the indicative interest received and the extent of engagement required with the governments regarding funding/support to be offered as part of the process.”

The letter, quoted by InDaily, added: “With respect to employees, the administrators have made no redundancies during the administration and have maintained open and frequent lines of communication with employees.”

KordaMentha and sales advisor 333 Capital are handling the sales process, which began on June 24. The administrators have invited selected bidders to now participate in due diligence.

KordaMentha was appointed as administrators in February, with the state and federal governments announcing support totalling $2.4 billion for the site soon after. This was followed by an additional $275 million, announced on July 23. 

SA premier Peter Malinauskas said last month that 33 parties had expressed interest in the steelworks, with 60 per cent of them offshore.

On Monday The Australian Financial Review reported that BlueScope has been working on a bid in a consortium with South Korea’s POSCO, Japan’s Nippon Steel and India’s JSW Steel. 

The report cites an unnamed POSCO spokesman, saying the company was examining the possibility.

“The steel mill itself is about 1.2 million tonnes and so there might not be that much of a synergy that’s possible, but there are mining opportunities, which we find quite positive,” the spokesman told The AFR.

“It has its own mine and also there are lots of renewable energy possibilities in the mid-to-long term, so low carbon sources like DRI [direct reduced iron] and HBI [hot briquetted iron] could be impacted positively, and so we are looking quite positively into the possibility of this kind of acquisition.”

The steelworks were formerly owned by the Sanjeev Gupta-led GFG Alliance. Unpaid debts have been calculated at over $1.3 billion.

Picture: credit Joeltbooth (public domain)

Further reading

Federal, SA governments tip in an extra $275 million for Whyalla steelworks as sales process continues

BlueScope secures right-of-last refusal for Whyalla Steelworks

Sale process for collapsed Whyalla steelworks gets underway

Whyalla steelworks was ‘relying on luck for safety’ before administration