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Category: Steel / Federal Government / Government and Politics / States and Territories

Arrium administrators to be replaced by KordaMentha

Tuesday, 12 Apr 2016 13:02:40 | Peter Ryan

Arrium steelworks at Whyalla on SA's Eyre Peninsula went into voluntary administration last Thursday. (ABC News: Nick Harmsen)

The administrator of failed steel company Arrium is set to be replaced in a sudden and bloodless coup that could delay the firm's restructure.

Key points:

  • KordaMentha replaces Arrium administrators
  • New administrators worked with unions prior to Arrium's collapse
  • SA Treasurer calls the disruption "regrettable"

Insolvency firm Grant Thornton, which was appointed less than a week ago, is to be forced out after a deal between banks and unions.

The details of its removal are being finalised at a Federal Court hearing in Melbourne.

Under the deal, it will be replaced by competitor KordaMentha, which had been working with the Australian Workers Union (AWU) in the lead-up to Arrium's failure.

KordaMentha is best known for a range of complex administrations including airline Ansett Australia, which collapsed in 2001.

The ABC understands Grant Thornton agreed to step down quietly rather than being sacked at the first creditors meeting, amid threats that bank creditors and the AWU would vote as a block.

The unlikely partnership with the AWU comes after banks, which are owed more than $1 billion, agitated behind the scenes for the appointment of their preferred administrator McGrathNicol.

McGrathNicol will work with KordaMentha on the Arrium administration.

SA Treasurer Tom Koutsantonis told the SA Parliament the latest disruption was "regrettable".

"This further disruption by the Australian banks and the continued use of Whyalla's future as a bargaining chip is distressing for those who are affected by the ongoing uncertainty and constant speculation," he said.

"In the event a new administrator is appointed, the South Australian Government and the Steel Task Force will continue the work begun with management last year."

The South Australian Government had warned against changing the administrators, urging for continuity.

In a statement last week, Grant Thornton said it had "stabilised the business to ensure to can run as usual" and they firmly believed the Whyalla works could continue operations.

Grant Thornton said on Sunday it was cautiously confident that Arrium's Whyalla steelworks in South Australia could be saved and the indebted business stood a chance of being restructured.

AustraliaPlus


 

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