‘Hard-wired to make losses’: Whyalla steelworks bleeding $1.5m a day
Whyalla steelworks was losing $1.5 million a day before being put into voluntary administration and owes creditors $1.34 billion, including $570 million to entities owned by British industrialist Sanjeev Gupta, which administrators have flagged as a disputed claim.
The steelworks in South Australia was plunged into voluntary administration two weeks ago owing employee entitlements of $189.7 million, the SA state government $40.2 million, and other secured creditors $281.5 million. Unsecured creditors are owed $837 million, the administrators appointed to sort out the mess, KordaMentha, said.
“There are a lot of people at this meeting who are owed a lot of money, and that is not lost on us,” administrator Sebastian Hams told a creditors’ meeting on Monday.
The Whyalla steelworks in South Australia is in adminstration for the second time in less than a decade.Credit: Ben Searcy
The steelwork’s mounting debts have left businesses and contractors reeling in Whyalla, an industrial town of 22,000 people about 380 kilometres north of Adelaide, where it employs about 1500 people and another 2500 contractors.
“One of the reasons this business is still here is because of the goodwill and the human capital and the supplier capital that’s been put in place to keep this business running,” Hams said.
Unions representing steelworkers said 619 of their members are owed $85.6 million. Another 423 salaried employees are out of pocket $62.5 million.
The company’s troubles prompted South Australia’s parliament to approve dramatic bipartisan legislation two weeks ago that enabled the government to call in voluntary administrators.
The day after the steelworks went into administration, Prime Minister Anthony Albanese and SA Premier Peter Malinauskas visited Whyalla to jointly announce a $2.4 billion rescue package aimed at upgrading the plant’s furnace and saving thousands of jobs at the site.
Gupta’s debt-ridden GFG Alliance, which owns OneSteel Manufacturing, the Whyalla steelworks company in administration, has been teetering on the brink since its key funding partner, Australian-founded Greensill Capital, collapsed in 2021.
