By Simon Evans
The sale process for the ailing Whyalla steelworks has drawn interest from 33 parties, says South Australian premier Peter Malinauskas, with 60 per cent of those coming from offshore.
He declined to name them, but said some were global steelmakers well known in the industry. South Korea’s POSCO, India’s JSW conglomerate and Japan’s Nippon Steel, have been named by industry analysts as potential buyers, along with Australia’s BlueScope.
Malinauskas acknowledged that the large taxpayer funding package put together by the federal and state governments had been crucial in attracting strong interest.
“It is fair to say we wouldn’t necessarily have seen the interest that we have had without those private companies knowing there’s going to be partnership with government,” he said.
Corporate advisor KordaMentha is running the sale process for the plant following a $2.4 billion bailout by the federal and South Australian governments after British industrialist Sanjeev Gupta was forced out following months of unpaid bills.
BlueScope is seen by many as a logical buyer, given its local knowledge.
“BlueScope has an interest in Whyalla but has not yet decided whether it would participate in the sale process. Any decision to do so will be subject to due diligence and normal investment hurdles,” a BlueScope spokesman said on Tuesday.
A team of engineers and technical experts from BlueScope were hired by KordaMentha in early March to help stabilise the loss-making steelworks at Whyalla, 380 kilometres north of Adelaide. But it is understood those dozen experts left the plant in late May to ensure there is no suggestion of BlueScope gaining an unfair advantage in the sale process through inside technical knowledge.
Wilson Asset Management portfolio manager John Ayoub said on Tuesday that much would depend on the amount of taxpayer funding which BlueScope could obtain over the long term.
“It all comes down to the conditions in place. With the right framework in place, it does make a lot of sense,” Ayoub said.
Federal Industry Minister Tim Ayres said the government wanted the right long-term operator, but he couldn’t talk about individual companies. The federal government would have a big say in the decision about a final buyer, he added.
Other parties who have looked over the Whyalla plant include representatives from billionaire Kerry Stokes’ Seven Group Holdings, which owns Boral and Coates Hire, and a private Sydney company backed by the Ibrahim family called Greensteel Australia.
Malinauskas reiterated on Tuesday that the goal was to provide certainty around the future of the Whyalla plant, which is the lifeblood of the town of 21,000 people and important for Australia’s sovereign steelmaking capability.
Gupta purchased the Whyalla plant out of administration in 2017, when KordaMentha handled that process after the collapse of ASX-listed Arrium. It formed part of his steelmaking empire, which stretched from the UK to Europe, the US and Australia, but he ran into trouble following the collapse of his major financial backer Greensill Capital.
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