Port Pirie smelter owner Nyrstar officially taken over by Trafigura as debt repayment deal signed
In good news for Port Pirie and SA taxpayers, the town’s smelter will resume production after operator Nyrstar was officially taken over by Trafigura — who guaranteed to pay off a $291m loan.
- FEBRUARY: Nyrstar at risk of defaulting on $291m debt
- MARCH: Nyrstar misses $20m repayment
- NOVEMBER 2018: $900m bailout to Nyrstar by major shareholder
- MAY 2018: Nyrstar misses first repayment on govt loan
Port Pirie’s lead smelter will resume production after commodity trading company Trafigura officially took over Nyrstar’s operations.
Nyrstar disabled its Port Pirie blast furnace in May in an unplanned outage, amid an outstanding debt owed to the South Australian government.
Treasurer Rob Lucas announced on Thursday that he approved the majority takeover by global commodity trading giant Trafigura, which came into effect in Europe overnight.
Trafigura has guaranteed it will pay off a $291 million loan guaranteed by the State Government by November 2022, as part of long-running negotiations with Mr Lucas.
It will initially pay $58 million in November, and make seven payments of $29.125 million every six months after that.
Cabinet consent was required before the takeover deal could be completed, which Mr Lucas said had put the Government in a “strong bargaining position” to guarantee the loan would be repaid in full.
Nyrstar had previously failed to make payments by agreed upon timeframes as its share price dropped dramatically and financial analysts advised investors to “abandon ship”.
Mr Lucas said the deal meant the loan was now “legally enforceable” and provided “much greater certainty over the repayment”.
He said the takeover was also great news for smelter workers in Port Pirie, given Trafigura had stressed it was a key component of their global operations.
Trafigura is a global company “with a much stronger balance sheet than Nyrstar eventually had globally” and the takeover should give confidence to the Port Pirie community, Mr Lucas said.
The chief operating officer of Trafigura’s mining operations, Daniel Vanin, has been appointed as the new chief executive of Nyrstar.
Mr Vanin said Nyrstar began “a new chapter” and said he’d been impressed by the “fundamental strength” of the company’s assets.
“I’ve seen many opportunities and solutions that could be implemented quickly. We
will also be able to draw on Trafigura’s technical, economic and other commercial expertise,” he said in a statement.
MORE TO COME
— with AAP