GFG’s inability to pay debts has left business in Whyalla hurt and reeling from the fallout
The refusal of Sanjeev Gupta’s GFG to meet its debts to dozens of contractors in Whyalla is hurting the economic fabric of the city.
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Web developer Tim Gilbert says friends and clients are going to the wall as money dries up in Whyalla, with dozens of contractors awaiting payments worth hundreds of thousands of dollars from the financially distressed GFG Group which owns the city’s steel works.
Mr Gilbert, who owns Codemash with partner Skai Skorup-Matthews, said even though his business did not directly deal with Sanjeev Gupta’s GFG it was still being hurt by the financial fallout from the steel company’s failure to pay its debts to local contractors.
“There’s probably at least a dozen (clients) I would say that are directly affected and I have regular conversations with a lot of them and a lot of them aren’t getting paid and they’re finding it hard to pay us,’’ he said. “I know of two who have gone into liquidation and there must be half a dozen on the verge.’’
Mr Gilbert urged the state and federal governments to step and do more to help Whyalla business.
It was a view backed by multiple contractors who only spoke to The Advertiser on the condition of anonymity.
One contractor who is owed more than $700,000 has left Whyalla to seek work in Adelaide.
“I’ve even moved my workforce to Adelaide to get work because I refuse to work for him (Gupta),’’ the contractor said.
Another who is owed around $500,000 said the “bottom line is we have to get rid of him and start again’’.
“Most companies won’t make it past June, they will be shutting the gates,’’ the contractor said.
A third said: “There is going to be some very serious shit going to go down.’’
All expressed concern that state and federal governments were “sitting on their hands’’ and by the time action was taken it would be too late for Whyalla.
In a town with an average house price of $373,000, there was also widespread anger at Mr Gupta’s purchase of multiple million-dollar properties.
A state government spokesperson said it “stands with creditors of the steelworks in urging GFG pay what it is owed’’.
The spokesperson pointed to last week’s announcement of a “$20 million suite of new measures to deliver important economic activity in the Upper Spencer Gulf’’.
Whyalla City mayor Phill Stone said the mood in the town was worse than when the then Arrium-own steelworks collapsed in 2016. Mr Stone said while he still took comfort from the state government’s commitment to Whyalla, this week’s statements by Premier Peter Malinauskas, including that the proposed $600 million hydrogen plant could be in doubt because of the problems at the steelworks, was another blow.
“It is taking the community a long time to get that spark back, to get their morale up. I think it was coming up, but the latest coming from the premier hasn’t helped how they feel,’’ he said.
Originally published as GFG’s inability to pay debts has left business in Whyalla hurt and reeling from the fallout
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