British billionaire Sanjeev Gupta has described Whyalla as his “spiritual home” while he struggles to keep his business empire afloat.
Gupta has sought to project a sense of calm, insisting it was “business as usual” despite his on-going struggle to keep creditors from carving up his company’s holdings.
“In summary, we are maintaining operations as usual; we’re benefitting from strong tailwinds in steel and iron ore markets and high demand for our products in Australia, and our refinancing discussions are progressing very positively,” it said.
“Whyalla will always be a special place for me; I have said before it is my spiritual home, I’ve made many friends since I acquired the business, both in the community and among our workforce. And from the beginning what I have admired most is their resilience.”
Gupta’s declaration came in a letter published by The Advertiser, where he also said his company was well on the way to securing new financing.
“We have already received multiple offers for refinancing from large lenders for our integrated mining and steelworks business in Whyalla and Tahmoor. We are now in advanced stages of due diligence,” it said.
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The letter is part of a charm-offensive and follows another published in British newspaper The Times on Friday where Gupta lashed creditors of Greensill Capital for making it difficult to recoup their money through “knee-jerk actions.”
Gupta’s business came under threat when its lender, Greensill Capital, collapsed leaving Swiss investment bank Credit Suisse holding bonds issued by Greensill that included invoices for Gupta’s GFG Group of companies.
That immediately triggered a race against time as the investment firm immediately sought to claw back its investment.
In Australia, Gupta’s GFG group of companies are now trying to refinance up to $500m to cover its local operations in South Australia and New South Wales.
The Swiss investment bank has applied to UK and Australian courts to wind up GFG Group entities including OneSteel Manufacturing, the owners of the Whyalla steelworks.
A court hearing scheduled in the NSW supreme court for 6 May. Should Credit Suisse succeed, the Whyalla steelworks will once more fall into administration.
Steel is the backbone of Whyalla with the plant employing 1,200 people in a region once known as the “iron triangle”. Its former owner Arrium had been in administration for 16 months when Gupta’s company swooped in to buy up the operation in mid-2017.
A second purchase gave him control of a structural steel operation with two mills near Sydney and Melbourne.
The move was a familiar play from Gupta whose business model involves buying up ailing industrial operations around the world for a steal and rebuilding them to profitability.
At the time the British billionaire was welcomed as a hero for his acquisition and promise to upgrade the operation, but the $1bn expansion has since stalled as the GFG Alliance companies were hit by the pandemic.
Federal and state governments have left open the possibility for a bailout.
Speaking to ABC Radio last week, South Australian premier Stephen Marshall said he was in no rush to make the offer and had been assured by the company that it could find alternative finance.
“We await to find out whether one, GFG can refinance between now and 6 May, or two, what the court will find and whether or not they will grant this application to appoint an administrator,” Marshall said.
“We’re hopeful that Sanjeev Gupta is able to refinance this business in Australia – we don’t want to see it broken up and we don’t want to see it sold off.
“From my perspective, I just want to see those jobs preserved here and I want to see us making steel.”
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