The Arrium meltdown is proceeding, from The Australian:
Deutsche is expected to fire the starting gun on the latest efforts to sell Arrium’s media grinding business, Moly-Cop, in mid-July after the German investment bank outmanoeuvred its peers to win the coveted advisory role earlier this month.
…There are a number of reasons behind such optimism. First, Arrium’s administrators have ordered Deutsche to explore a dual-track auction, and the simultaneous preparations to float Moly-Cop may serve to strengthen the resolve of trade buyers and opportunists.
…Second, confidence in the vendor’s ability to sell Moly-Cop will be rock solid this time around. Arrium’s drastic unravelling post the iron ore price slump was widely known and instilled doubts among some bidders about whether management would win the backing of its lenders to undertake the sale, sources close to the process argued.
So far so good but this is not reassuring, from Reuters:
The South Australian government said on Thursday it would provide A$50 million ($37 million) in funding to help keep Arrium Ltd’s loss-making Whyalla steelworks open under a new owner.
State Labor premier Jay Weatherill has also pressed Australia’s two major parties to commit to contribute A$100 million from the federal government to help keep Whyalla open.
“The Arrium operations at Whyalla are critical to both South Australia and the nation as a whole – it is essential that we retain our sovereign steel-making capability,” Weatherill said in a statement.
The call on national politicians to support Whyalla came amid heavy campaigning in South Australia for the July 2 federal election, as the Liberal National coalition faces a potential loss of seats in the state.
The SA government is not going to be shopping this around if the administrator were inundated with offers.
While the Turnbull Government has vomited $85bn in submarine pork on the state to back-fill the car industry black hole it created by refusing to pay $500mn, the Whyalla $100mn (which is an 850x smaller commitment) is clearly not a big enough waste to bother.
