From Bartho:
Had the GSO deal, or a renegotiated version of it, been effected, the Whyalla plant would have been kept alive, at least for some time. Its future would also have become GSO’s problem, not the banks’, which will wear a lot of political and community flak if the steelworks are shut down, thousands of jobs lost and the future of Whyalla itself is clouded.
It is conceivable that the Grant Thornton team, which will run the businesses ‘’as usual’’ while it comes to grips with their situation and its options, might be able to strike a deal with one of the private equity groups that have been circling Arrium, whether it is GSO or another firm, that recapitalises the existing entity.
The banks, confronting an even worse outcome — potentially far worse — than envisaged by the GSO proposal, might be more co-operative.
…That is the horror outcome for Whyalla, its people, South Australia and the banks, who pushed hard but unsuccessfully for the administrator of their choice — McGrath McNicol — not only to gain some influence over the process but because they believed there was a path to avoiding the closure of Whyalla.
The fog of war is rolling out now. I have no special knowledge on this but it would be consistent with the views of Ken Henry – who describes anyone with a passing interest in sustaining local manufacturing as “mercantilist” – to have sought the closure of the Whyalla plant if the banks could get moved up in the credit queue and been repaid out of the sale of Moly-Cop. I therefore lean more towards Matthew Stevens’s take on what the banks wanted than this one from Bartho.
If so, shafting them is a better outcome for Arrium and Whyalla if it opens new corridors to possible rescue for the mill.
