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Arrium creditors demand answers over outstanding payments

Tuesday, 19 Apr 2016 14:10:18 | Tom Fedorowytsch

Up to 100 people in Whyalla tuned into the creditors meeting being held in Sydney. (ABC News: Angelique Donnellan)

Small businesses owed money by debt-laden steelmaker and miner Arrium have demanded to know when they will be paid at a creditors meeting held in Sydney.

Key points:

  • Arrium creditors meeting held in Sydney and Whyalla
  • Small businesses say they are concerned they will not be paid
  • The next creditors meeting will be in four weeks' time

The meeting was streamed live to about 100 workers in Whyalla in South Australia, where the company's steelworks are located.

Arrium went into voluntary administration earlier in April with debts of more than $4 billion.

Administrator Mark Mentha from KordaMentha tried to reassure creditors that Arrium, which has 10,000 suppliers and 30,000 customers, would be business as usual.

But some of Arrium's creditors expressed concerns about their own viability without receiving their regular payments from the company.

Hal Longhurst from Acclaim Hydraulics in New South Wales said he was worried about Arrium's operations being "frozen in time" during the administration process.

"I understand next creditors meeting is theoretically four weeks plus away," Mr Longhurst said.

"For smaller family owned businesses, we'd all like to see this company recover, but I'm not going under for it, so is there anything more definitive than frozen in time?

"Like everybody in this room, we traded in good faith ... we did everything we were told to do, and now we're working out how to borrow money to pay employees, because people won't pay their bills."

Mr Longhurst took issue with the phrase "business as usual".

"Business as usual means I deliver goods and services, and I don't get paid," he said.

Administrators 'understand' creditors difficult positions

Mr Mentha said he understood Arrium's administration had put creditors in difficult positions.

"We are fully aware of hardship that non-payment of outstanding debts has, particularly on small businesses, but all businesses," Mr Mentha said.

KordaMentha representatives at creditors meeting Photo: Mark Mentha (left) and Cassandra Mathews (right) from KordaMentha hold the first creditors' in Sydney. (AAP: Dean Lewins)

"Whilst we look at the big picture and the strategic issues and deal with billions of dollars, we also need to deal with granular issues in terms of the impact it's having on you and your family, and other businessmen and women right around the country."

Another creditor, Raj Limaye, said he was a director of companies that were secure creditors waiting for an overdue payment of up to $700,000.

"We are owed money and you are not talking about paying us any of the money that is overdue, yet you are asking us, or expecting us to continue supplies?"

Several creditors nominated for positions on a committee, joining those received by organisations including the big four banks — CBA, NAB, Westpac and ANZ — as well as the Australian Workers Union, the Australian Council of Trade Unions, and the South Australian and Commonwealth Governments.

KordaMentha said it had been "heartened and inspired" by the support of stakeholders, including employees, customers, suppliers and the Government.

Arrium was rocked by falls in the price of iron ore and steel of at least 50 per cent.

Mr Mentha said the next creditors meeting would be held in at least four weeks' time.

AustraliaPlus


 

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