While South Australians embattled Whyalla Steelworks has been throw a $2.4b federal government lifeline, the company is still facing financial challenges. Creditors are still owed more than 1.3 billion dollars. But an investment firm has taken over the steelwork’s reins aiming to stabilise the plant and find a buyer.
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TVTranscript
00:00Sebastian Hands, thank you so much for joining us today.
00:05When you first saw the state of the steelworks, how surprised were you?
00:09I was quite shocked.
00:11Clearly very little maintenance has been done since we were last here.
00:15There are some significant issues that we need to address.
00:18For example, the traffic lights at the opening of the steelworks weren't working.
00:23I think that's just a really good example of some really fundamental maintenance and
00:27capex issues that we needed to address.
00:30Now it's the second time in 10 years that we've seen administration here at the steelworks.
00:34Is this still a viable operation?
00:36It's really challenging.
00:38The business has been losing a lot of money, particularly over the last 12 months.
00:42So look, there is a pathway to the future, but there's a significant number of capital
00:47expenditure items that we need to address in order to get the business on a solid footing
00:52going forward.
00:53Is this worse than when Quartermentha took over last time in 2016 after Arrium collapsed?
00:58Right at the moment it is worse.
01:00The upside is there is some clarity on what the future looks like.
01:04We've just got to get from A, the stabilisation phase that we're in now, and transition into
01:09that next phase, the capital expenditure phase.
01:12And how hard do you think it will be to find a buyer?
01:15It's going to be challenging.
01:16But that said, we're really blessed and very lucky and grateful to the state government
01:21and the federal government.
01:23The governments have collectively committed $2.4 billion.
01:27So that is going to be a material advantage to us in finding a buyer.
01:32That gives a buyer confidence that the government is behind us, and that'll be really important
01:37to us going forward.
01:39And what sort of interest have you had so far?
01:41Look, we've had interest.
01:43I think we've had upwards of 10 interested parties.
01:46But that said, look, it's early doors.
01:48You get a lot of emails from people who perhaps might not be around at the back end of the
01:53process.
01:54We know who's interested in this.
01:56You know, there's domestic players, there's international players.
01:58This is a big piece of expenditure.
02:01So it's not going to be a fly-by-night operator.
02:03It's going to be a really established steelmaker.
02:06Is Blue Scope still one of those?
02:08I would hope Blue Scope would be absolutely part of that process.
02:11Last time, staff did have to take a pay cut.
02:13Is that something that's on the cards this time?
02:15That's not something we're entertaining at the moment.
02:17Cordomantha were administrators in 2016 when Sanjeev Gupta's GFG Alliance was selected
02:22to take it over.
02:24In hindsight, was that a mistake?
02:26No.
02:27We did our due diligence at that point in time.
02:29When we sold this business to Mr Gupta back in 2017, we did our due diligence.
02:34We went through that process.
02:36What has transpired in the last eight years, nine years, has happened.
02:41And just finally, what is your message for the workers here and for Wayala?
02:45How confident can they be moving forwards?
02:48There's two messages I would give to both our employees and our subcontractors, both
02:52here in Wayala, out at the mines.
02:55We're in a situation where we are only here by virtue of their work.
02:59So my first message to them is thank you.
03:02The gratitude that we can display towards you is real and should be really acknowledged
03:08across the community.
03:09The second piece is we're going through this stabilisation phase.
03:13And when I say we, it's the entire community.
03:15It's the community of Wayala.
03:17All of our employees, the employees of the subcontractors, it's going to be a tough period.
03:21But what we have committed to everyone is we'll keep you engaged and we'll keep you
03:25informed on this journey.