The banks and the Australian Workers’ Union successfully applied in a federal court yesterday to have KordaMentha installed in place of Grant Thornton as administrators of the struggling steelmaking and mining group.
KordaMentha partner Mark Mentha said today that all of the parties were focused on preserving jobs and value in the business.
“Absolutely, this is a really good outcome for the people of Whyalla and the broader business for this main reason – what we have now is all the creditors are aligned in getting the best outcome for a going concern business which is about preserving jobs and it’s about preserving value and about preserving the business as a going concern,” Menthe told ABC radio.
“… the major difference this week compared to last week with the new administrators is we’ve got fresh eyes, we haven’t been party to any of the negotiations taking place in the past between the company and its financiers and its creditors.”
He said it was too early to consider whether to keep Arrium as a whole, or break it up for sale, but KordaMentha would be “very open to all the strategic options available to the company”.
“I think our message to all stakeholders: employees, suppliers, customers, the union movement, the governments, the financiers – both here and overseas – is we’re restoring business as usual.”
However, South Australian Treasurer Tom Koutsantonis said the move had created more uncertainty for 1600 Arrium workers in Whyalla and thousands more across the nation.
Koutsantonis said the government had been in advanced negotiations with Grant Thornton’s Paul Billingham to ensure Arrium and its creditors could continue to trade.
Grant Thornton said it would do all it could to support the incoming administrators in the transition and expected the impact of the change would be minimal.
Managing partner Paul Billingham said in a statement that the creditors have the right to appoint the firm they wish to represent them in the administration.
“When it became clear that the major stakeholders wished to see a change to a firm not appointed by Arrium, we agreed for the benefit of the process to support an early change as opposed to waiting until the first creditors’ meeting,” he said.
“We believe there is little doubt that the voluntary administration will provide an opportunity to restructure the Australian steel and mining business starting in Whyalla, and also improve the successful East Coast operations.”
The AWU said the new appointment “offers the best way forward for all stakeholders”.
In a statement, it said the move “was only made possible through the constructive and collaborative approach adopted by Arrium’s major institutional creditors and the union, as the representative of Arrium’s employees”.
“The AWU looks forward to working constructively with KordaMentha as the new administrator, engaging in a business-as-usual approach to Arrium’s operations, and ensuring we work in the interests of our members.”
Acting Whyalla mayor Tom Antonio said the decision returned the town to uncertainty.
– with AAP
