THE Newcastle steel mills owned by companies associated with entrepreneur Sanjeev Gupta are not affected by the legal and financial battle over the Whyalla steelworks, which supplies the mills with steel, company sources said yesterday.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Mr Gupta has a metals and energy business employing a reported 35,000 people globally, but his rapid debt-driven expansion - which included buying the former BHP steel assets in the financially distressed Arrium/OneSteel business in 2017 - has had its share of critics.
Their concerns appeared to be justified in March when an Australian "factoring" business Greensill Capital - which pays companies for their supply chain invoices and then chases the money itself - collapsed earlier this year, putting pressure on parts of the Gupta empire.
It emerged from this process that the supply chain financier Greensill was in effect a major lender to at least part of Mr Gupta's empire.
Global finance house Credit Suisse - which had in turn financed Greensill - had turned to the courts in Britain and Australia to obtain "wind-up" orders against the Whyalla steelworks and its major source of coking coal, the Tahmoor mine south of Sydney.
The Australian matter is due back in the courts in July and a British hearing due this week has been reportedly postponed.
Sanjeev Gupta took OneSteel out of administration, so it's not the first time the Newcastle workforce have been confronted with concerns like this
- Australian Workers Union
Earlier this week, Mr Gupta announced a new $430-million financing arrangement "sufficient to pay out its Greensill debt in full and to provide ongoing working capital" for Whyalla and Tahmoor - reportedly with a San Francisco company, White Oak Global Advisers.
A spokesperson for Mr Gupta's GFG Alliance said yesterday that the Newcastle mills were in a separate corporate structure, Infrabuild, which did not borrow from Greensill.
The Australian Workers Union, which has hundreds of members at the Newcastle steel mills - which were originally built for the BHP steelworks - says the local workforce has watched the situation unfold.
But because they had been through worse when Arrium went under, they were not overly concerned at this stage.
The union says the steel industry is critical to employment and national sovereignty and that Whyalla must not be allowed to fail.
Steel from Whyalla feeds the Newcastle mills.
IN OTHER NEWS:
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content:
- Bookmark: newcastleherald.com.au
- Download our app
- Make sure you are signed up for our breaking and regular headlines newsletters
- Follow us on Twitter
- Follow us on Instagram
- Follow us on Google New
Ian Kirkwood
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
Reporting journalist at the Newcastle Herald since 1987. Editorial writer, general reporter, industrial relations, industry and coal.
