Investors, Steelmakers Express Early Interest in Australia-Based Arrium
06/16/2016 - POSCO and several investment firms from the U.S. and the U.K. reportedly are kicking the tires on Australia’s Arrium Group, which was placed into voluntary administration earlier this year.
In fact, more than 40 entities have expressed an interest in parts or all of the iron ore producer and steelmaker, reports the Australian Financial Review.
The formal sales process is set to begin in July. In advance of that, state and federal officials are hoping to put together a Financial aid package to help lure a buyer.
Jay Weatherill, premier of the state of South Australia, is offering AU$50 million in cash to whoever buys Arrium’s Whyalla steelworks on the condition that they put the money back into the plant. There also are calls for the federal government to commit AU$100 million to the operation.
Australia Prime Minister Malcolm Turnbull, however, has said that would amount to subsidizing a sale to a foreign buyer, although he didn’t rule out pledging some form of assistance before a 2 July election, the Financial Review reported.
In the meantime, Arrium’s administrators at advisory and investment firm KordaMentha are continuing to work on stabilizing the business in advance of the sale.
Administrator Mark Mentha reported that they’ve found AU$300 million in savings for the next fiscal year. And, he said, the Whyalla steelworks is set to break even, while Arrium’s iron ore business likely will turn a small profit, the Australian Associated Press reported.
In a statement posted on the firm’s website, Mentha said the AU$150 million in government support would certainly help the sales and recapitalization process.
“This will make Arrium a much more attractive and sustainable proposition for potential investors,” he said.
The formal sales process is set to begin in July. In advance of that, state and federal officials are hoping to put together a Financial aid package to help lure a buyer.
Jay Weatherill, premier of the state of South Australia, is offering AU$50 million in cash to whoever buys Arrium’s Whyalla steelworks on the condition that they put the money back into the plant. There also are calls for the federal government to commit AU$100 million to the operation.
Australia Prime Minister Malcolm Turnbull, however, has said that would amount to subsidizing a sale to a foreign buyer, although he didn’t rule out pledging some form of assistance before a 2 July election, the Financial Review reported.
In the meantime, Arrium’s administrators at advisory and investment firm KordaMentha are continuing to work on stabilizing the business in advance of the sale.
Administrator Mark Mentha reported that they’ve found AU$300 million in savings for the next fiscal year. And, he said, the Whyalla steelworks is set to break even, while Arrium’s iron ore business likely will turn a small profit, the Australian Associated Press reported.
In a statement posted on the firm’s website, Mentha said the AU$150 million in government support would certainly help the sales and recapitalization process.
“This will make Arrium a much more attractive and sustainable proposition for potential investors,” he said.
