GFG Alliance boss Sanjeev Gupta says Whyalla steelworks is making ‘meaningful progress’

GFG Alliance boss Sanjeev Gupta says his company has an ‘unshakeable path’ to making headway with its many creditors, as he ‘vigorously pursues’ an emergency debt package.

Sanjeev Gupta at the Whyalla steelworks.

GFG Alliance executive chairman Sanjeev Gupta says he is confident the Whyalla steelworks will emerge from its current crisis “stronger then before”, and says an emergency $150m debt package is being pursued “vigorously’’.

Mr Gupta said while the debt funding from an unnamed global credit firm was overdue - it was originally meant to be finalised by the end of December - he remained resolute that it would eventuate.

“To expedite our recovery, we are vigorously finalising new financing,’’ Mr Gupta said in a statement.

“Although this process has taken a bit longer than anticipated, I remain confident of its delivery.

“This funding, along with the important gains already made through the ongoing implementation of our Back to Black initiative, is part of our unshakeable path to creating tangible financial headway with our creditors. It is a key plank to achieve normality again and realise our future ambitions.’’

The blast furnace at the Whyalla steelworks recently came back online.

Mr Gupta has been facing pressure on a number of fronts, with the South Australian State Government revealing in recent days that his company, GFG subsidiary Liberty Primary Metals Australia (LPMA), owed the government “tens of millions” in unpaid royalties and another $15m or so to SA Water.

This in top of unspecified significant amounts owed to industry creditors including rail haulage companies Pacific National and Aurizon and several small to medium sized businesses.

And in New South Wales the company last week stood down about 400 workers at the Tahmoor Coal mine, where LPMA is also understood to owe creditors significant amounts of money.

The blast furnace at the steelworks has had two major outages over the past year, plunging the business unit into a loss-making position.

“The GFG business in Whyalla is currently navigating one of the most challenging periods in its history, and we understand the anxiety this creates for our people and stakeholders about the future,’’ Mr Gupta said.

“Despite these challenges, rest assured my commitment to Whyalla will not be shaken. GFG has invested vast sums of money to keep Whyalla going and Whyalla will remain our highest priority.’’

Mr Gupta said the steelworks was steadily ramping up production after returning to steelmaking in January.

“Our revenue, through additional steel sales, is continually increasing and we have already reduced our losses in the steelworks by more than 30 per cent since the restart of the blast furnace,’’ he said.

“This continuous ramping-up is critical and we can only be successful if all stakeholders work together to not lose ground.

“While we still have considerable work ahead, these clear improvements are vital as we work to catch up with our creditors - who have shown remarkable patience - and to whom we extend our deepest gratitude’’

Mr Gupta said he believed the steelworks would emerge from the crisis stronger than before, and said he was also optimistic there would be a steel markets recovery this year.

“Our conversations around future energy options to enable our green steel aspirations are ongoing, and we remain engaged with the State Government,’’ he said.

“Our focus is on practical, sustainable steps that support both our aspirations and the economic future of the business.’’

Originally published as GFG Alliance boss Sanjeev Gupta says Whyalla steelworks is making ‘meaningful progress’