Whyalla Steelworks - Voluntary Administration

Whyalla Steelworks, the embattled steelworks owned by commodity tycoon Sanjeev Gupta through his family conglomerate GFG Alliance, has been placed into voluntary administration by the South Australian government after changes to the Whyalla Steel Works Act were introduced to Parliament and passed both houses, giving South Australia the power to place the steelworks into administration.

Premier Peter Malinauskas explained that the government took the step after the company — Whyalla’s biggest employer, home to 1,100 workers and supporting more than 2,000 indirectly — stopped making payments to employees.

The steelworks had already been struggling to meet its obligations to the state government, creditors and contractors, but had been making payments to employees (albeit often not on time). This changed in recent months, according to the premier, who said administrators KordaMentha will seek to stabilise the business and stop the recent waves of redundancies at the company whilst a buyer is sought.

Whyalla Steelworks and its associated mining operations will continue operating during the voluntary administration period with funding provided by the South Australian government, which recently announced a multi-billion dollar package to “save Whyalla Steelworks, support local jobs and encourage more investment into Australian made iron and steel”. The support includes: (1) “immediate, on the ground support” of $100 million, including “creditor assistance payments” of $50 million; (2) $384 million to stabilise the steelworks; and (3) $1.9 billion to invest “in the steelworks’ future”, including the announcement of a new Green Iron fund to boost green iron manufacturing and supply chains, up to $500 million of which is earmarked to support the longer-term transformation of the steelworks, as well as “substantial additional financing to partner with a future owner and operator to upgrade the facility and ensure a green steel future for Whyalla and South Australia”.

This marks the second administration for Whyalla Steelworks in under a decade, with the previous 2016-2017 administration process ending in the sale to Mr Gupta.