The Whyalla steelworks administrators say they don't currently have enough money to run the business for the up to 12 months they'll need to get the embattled business ready for sale. Court documents lodged by Korda Mentha say its in the best interest of creditors to extend the administration period so it can turn around operations with steelworks currently losing $1.5 million dollars a day. It comes as the blast furnace is set to be shut down from tomorrow.
Category
📺
TVTranscript
00:00Waiala's blast furnace has been shut down for extended periods over the past 12 months,
00:08but both the Administrator, Korda Mentha, and the South Australian Government expect
00:12the shutdown scheduled for tomorrow will last for as little as 36 hours.
00:17The decision to stop production came as experts from Blue Scope Steel, who have been brought
00:21in as specialist advisors, recommended maintenance go ahead immediately.
00:27This is all good work that should have been done, should have been kept up with, hasn't
00:30been kept up with.
00:32It's pretty clear to me that these works now are a clear indication that the State Government
00:37stepped in at just the right time, otherwise it could have been catastrophic.
00:41Court documents seen by the ABC also revealed Korda Mentha believes the steelworks should
00:46remain under administration for up to another 12 months to get it running properly and ready
00:52for sale.
00:53It states the one steel business under GFG had a long period of underinvestment, inadequate
00:59or no maintenance, poor health and safety practices, and debts of $1.3 billion.
01:06With the business currently losing $1.5 million a day, Korda Mentha says it doesn't have sufficient
01:12funding to continue operations for the 12 months.
01:16Federal and State Governments have allocated $384 million to run the plant through the
01:21administration period, but Energy and Mining Minister Tom Coutts and Tonis is hopeful they
01:27won't need to add to that.
01:28If there needs to be top-ups, there will, but what we're keen to do is make sure that
01:32we can get a lot more revenue back into this system so that the administrator has the funds
01:37that they need to successfully execute a successful sale.
01:41While that's some reassurance for Wyala and the steelworks' 3,000 direct and associated
01:46workers, it appears the long road to recovery just got a little longer.