‘ Man of steel’ wins Ar­rium bid bat­tle

Townsville Bulletin - - NEWS - PRASHANT MEHRA

A MUL­TI­MIL­LION­AIRE in­dus­tri­al­ist dubbed Bri­tain’s “man of steel” has won the bat­tle for Ar­rium, end­ing more than a year of un­cer­tainty for the col­lapsed steel­maker.

Bri­tish con­sor­tium GFG Al­liance, led by met­als mag­nate Sanjeev Gupta, trumped a ri­val pro­posal from a South Korean group late on Tues­day.

Ar­rium ad­min­is­tra­tors Kor­daMen­tha yes­ter­day set­tled the sale with GFG.

Ad­min­is­tra­tor Mark Men­tha said the deal was “a great re­sult for Ar­rium Aus­tralia em­ploy­ees” and for the South Aus­tralian city of Whyalla, where Ar­rium’s flag­ship steel­works is lo­cated.

“It en­sures their fu­ture and ends 15 months of un­cer- tainty,” Mr Men­tha said in a state­ment.

He did not dis­close fi­nan­cial de­tails of the bid.

GFG or Gupta Fam­ily Group – com­pris­ing the Lib­erty House steel­mak­ing and in­dus­tri­als group and com­modi­ties busi­ness SIMEC – has bought Ar­rium’s op­er­a­tions, which in­clude the Whyalla steel­works and port, an east coast steel busi­ness, and an iron ore mine in South Aus­tralia.

GFG submitted a re­vised bid for the Ar­rium busi­ness on Tues­day to beat South Korean pri­vate eq­uity firm Newlake Al­liance Man­age­ment.

Newlake was cho­sen as the pre­ferred bid­der in June but is be­lieved to have made its pro­posal con­di­tional on fur­ther gov­ern­ment sup­port. It was un­able to fi­nalise the sup­port be­fore its ex­clu­siv­ity pe­riod ended last week.

Lib­erty and SIMEC hold in­ter­ests span­ning steel­mak­ing, alu­minium smelt­ing, en­ergy, com­modi­ties trad­ing, ship­ping, prop­erty and fi­nance.

Chair­man Sanjeev Gupta, known as Bri­tain’s ‘ man of steel’ for turn­ing around dis­tressed steel as­sets, shot to promi­nence last year after of­fer­ing to res­cue Tata Steel’s UK steel plants.

“We aim to lever­age the ad­van­tages of in­te­gra­tion across the value chain, from raw ma­te­ri­als and metal pro­duc­tion to high- end en­gi­neered prod­ucts,” Mr Gupta said in a state­ment after the deal was an­nounced.

“The Ar­rium busi­ness fits per­fectly with this strat­egy and we be­lieve it has an ex­cit­ing fu­ture.”

The deal will se­cure the jobs of more than 5500 Aus­tralian work­ers at Ar­rium, he added.

Ar­rium, for­merly known as OneS­teel, was placed in vol­un­tary ad­min­is­tra­tion in April 2016 after lenders re­fused to take a se­vere dis­count on their debt as part of a res­cue deal.

The com­pany, which for­merly op­er­ated as BHP’s long steel prod­ucts divi­sion, was hit hard by a plunge in iron ore and steel prices.

The ad­min­is­tra­tors have cut costs by $ 300 mil­lion through re­duced sup­ply con­tracts and sav­ings, while the SA gov­ern­ment has pledged $ 50 mil­lion to the new owner to help up­grade the plant.

GFG’s pur­chase de­pends on ap­proval from Ar­rium’s cred­i­tors com­mit­tee and the For­eign In­vest­ment Re­view Board.

The Aus­tralian Work­ers’ Union wel­comed the deal, say­ing the GFG Al­liance en­joyed an “out­stand­ing in­ter­na­tional rep­u­ta­tion” after in­vest­ing strongly in heavy in­dus­try in Europe and the UK.

Sanjeev Gupta.

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