New finance is coming, Sanjeev Gupta tells Whyalla

Sanjeev Gupta is assuring governments and the people of Whyalla that he is in the ‘advanced stages’ of securing finance.

Sanjeev Gupta declares the Whyalla steelworks not only profitable but his ‘spiritual home’ in a letter he has written to the South Australian city from his current base in Dubai. Picture: AAP

Sanjeev Gupta is assuring the federal and South Australian governments and the people of Whyalla that he is in the “advanced stages” of securing refinance for the $US5bn ($6.56bn) debt he owes Greensill, despite Credit Suisse and Citibank seeking to wind up chunks of his steel empire.

Mr Gupta declares the Whyalla steelworks — which he bought from Arrium in 2017 after it fell into administration — not only profitable but his “spiritual home” in a letter he has written to the South Australian city from his current base in Dubai.

The letter comes as the Morrison government confirms it is working on a back-up plan to keep Mr Gupta’s Whyalla steelworks afloat after a move by creditors to seize control of his local industrial operations.

Citibank, acting on behalf of Credit Suisse, last week filed a winding up in insolvency application for OneSteel Manufacturing in Whyalla and Tahmoor Coal — a move that has put more than 2000 jobs at risk.

Mr Gupta’s letter, penned on Friday, blasts the move, as well as a similar action Credit Suisse has filed in Britain, as “dangerous and cavalier”, signalling he won’t go down without a fight.

“Whyalla has long played an important role in Australian manufacturing, providing high-quality steel that has shaped much of the country’s infrastructure for many decades. I care deeply about continuing this legacy and building upon it to ensure a sustainable future for industry and society,” Mr Gupta says in the open letter to Whyalla residents.

“I also care deeply about my people, their futures and their communities; rest assured my team and I are working tirelessly to refinance the business away from Greensill’s creditors.”

For the past three weeks, Mr Gupta has been using every opportunity available to him to say he has received several refinancing offers for his GFG Alliance group of companies.

Last month, Finance Minister Simon Birmingham told a Senate Committee that Mr Gupta had told the federal and South Australian governments he was making progress to move his debt away from Greensill, which collapsed into insolvency five weeks ago.

“He has given some assurances around the work that GFG have been doing to refinance [its] debts and operations and the relatively positive indications that he has made in terms of the progress, he believes, of that work,” Mr Birmingham told the committee.

“It’s a few days since I was last advised of any conversations between Mr Gupta and the Australian government or the South Australian government but, broadly speaking, that’s the nature of what he has volunteered and GFG have volunteered to both state and federal governments.”

But last week, Mr Birmingham said the government was preparing for a possible collapse of OneSteel and other GFG assets.

“Governments do need to be mindful of the experiences we’ve seen before when Whyalla has moved into administration, where we did have to provide some financing options for the steelworks that enabled it to continue working during that period of administration,” Mr Birmingham said last week.

Mr Gupta, however, reiterates in his open letter on Friday that refinancing talks are continuing, although a deal is yet to be struck.

“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,” he says.

“In summary, we are maintaining operations as usual; we’re benefiting 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.

“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 …”

Originally published as New finance is coming, Sanjeev Gupta tells Whyalla