South Australian Treasurer Tom Koutsantonis has expressed the optimism that the ailing steel company Arrium will bounce back and Whyalla Steel unit’s operations will run smoothly despite the company’s current woes.
Arrium’s new administrators had announced that they would be able to restructure the group successfully, starting with the Whyalla steelworks, reports Sky News.
Koutsantonis said in a statement that he is impressed by the comments made by the newly appointed administrators that operations can be turned around and thousands of Whyalla.jobs can be salvaged.
Arrium has been battling a debt burden of more than $4 billion and is under voluntary administration since April second week. More than 8,000 jobs are at risk at the Whyalla unit and nationwide as creditors are opposing a bailout plan sketched by the company in association with American hedge fund Soros Capital.
The SA treasurer said the governments at state and federal level, along with Arrium management and banks should work out a package for making the Whyalla plant viable.
“We’re not talking about redundancies, we’re not talking about wage efficiencies,” he said.
He said the ongoing talks with SA government are mainly focused on capital improvements and in making the operations efficient.
Paul Billingham of administrators Grant Thornton said restructuring would vastly improve the Arrium’s asset value and the groupwide recapitalization will do good for the creditors.
“Our joint aim is to now swiftly bring together all key parties in a collective effort to save Whyalla,” he said.
Meanwhile, the optimism of SA minister seems to have been partially blunted by the statement made by Federal Immigration Minister who ruled out any bailout package for the troubled steelmaker.
Minister Peter Dutton said there is no such precedent of a bailout package and noted the Government made no offer of financial aid to Qantas and SPC Ardmona when they faced similar crises.
Dutton said the government would not take the risk of spending millions of taxpayers’ dollars to save Arrium despite a positive outlook projected by the administrators, reports The ABC.
“For governments to take an equity stake or to try and pick winners — as Labor governments at a state and federal level have proven over many, many years — that is a fraught exercise, and ultimately you put at risk taxpayers’ money,” Dutton said.