AWU in emergency talks with Sanjeev Gupta over Whyalla

The Australian Workers’ Union has held emergency talks with Sanjeev Gupta’s Australian management seeking assurances over facilities including the Whyalla steelworks.

British industrialist Sanjeev Gupta at the Whyalla Steelworks. Picture: AAP

The Australian Workers’ Union has held emergency talks with Sanjeev Gupta’s Australian management as it seeks assurances over the future of industrial facilities including South Australia’s Whyalla steelworks.

As concerns grow its main banker Greensill Capital will file for insolvency, the AWU sent union delegates to Whyalla and InfraBuild plants in recent days to meet with workers who are worried over the health of the business and whether they would continue to be paid.

“We’ve been in pretty dialogue with them over the last few days and over the weekend monitoring the current situation and ensuring we’re able to get as much information and feedback from our members as possible,” AWU national secretary Daniel Walton told The Australian. “Certainly it’s clear things are quite fluid at this point in time.”

Mr Gupta is locked in talks seeking to refinance Greensill debt with the union leader expecting it may be weeks before any resolution is reached.

If Greensill is forced into an emergency restructure, Mr Gupta will be under pressure to hammer out a refinancing deal at even shorter notice.

“I have a sense that this is going to play out over weeks rather than days. I don’t think we’ll see a big snap like the Arrium administration – I suspect this will roll on for a while.”

The AWU is also sharing information with British steel union Community which is holding meetings in the UK over concerns thousands of steel and engineering jobs could be at risk.

“We’ve been meeting with and having regular dialogue with the union in the UK to keep abreast about what they’re seeing and hearing,” Mr Walton said.

The AWU was heavily involved in the sales process which saw Mr Gupta swoop on the Whyalla plant as part of a buyout of Arrium in 2017 after it entered voluntary administration.

UK union officials are scheduled to hold a Zoom meeting with Mr Gupta early this week to discuss the fate of workers with Liberty the third largest steel manufacturer in the country across 11 sites including Newport and Scunthorpe.

The fate of Greensill still hangs in the balance as the supply chain financier remains in talks to spin off some of its business at a huge discount to private equity giant Apollo.

However, any deal would not include Mr Gupta’s sprawling empire leaving the industrialist scrambling to find a new provider of short term financing.

Greensill‘s main insurer cut a $4.6bn policy last week as it grew uncomfortable over its exposure, triggering Credit Suisse to wind down $US10bn of funds invested in loans arranged by the financier.

Mr Gupta is now preparing to cut back on new projects and planned expansions in Australia as uncertainty swirls over the future of his industrial empire, company insiders said.

Private equity majors have begun circling Mr Gupta’s Australian Infrabuild business amid speculation the close relationship between Mr Gupta and crisis-hit finance group Greensill could trigger a domino effect and put even his profitable assets in play if funding lines dry up and complex financing arrangements worth billions are called in.

While no offers are believed to have yet been put to Mr Gupta, market sources say major private equity providers have begun sharpening up pitches for his profitable Australian businesses if he is unable to find new lenders to less profitable assets – including the Whyalla steel works – and is forced into a distressed sale.

Originally published as AWU in emergency talks with Sanjeev Gupta over Whyalla