Whyalla hotel among KordaMentha portfolio as administrators work with creditors for OneSteel Manufacturing steelworks and mines

A beachfront hotel that once catered for the late Queen, boasting sweeping views of the Whyalla foreshore, is among Sanjeev Gupta’s assets under administration.

The Beach Hotel Whyalla. Picture: Supplied

Whyalla Steelworks and mines administrators have discovered a surprise hotel with sweeping views of the foreshore among its portfolio taken over from GFG Alliance’s OneSteel Manufacturing.

GFG Alliance chief Sanjeev Gupta swooped in to buy the Foreshore Motor Inn at one of the steel city’s prime spots in November 2023 after its former owners struggled with a sale to developers for five years.

Mr Gupta’s picture reportedly still hangs in the glass-fronted restaurant overlooking the Whyalla beach that is now part of a rebadged The Beach Hotel Whyalla, its buildings showing similar signs of neglect as the city’s ailing steelworks and its on-site pool drained of water.

One staff member at the hotel restaurant recently confirmed that the GFG Alliance chief regularly stayed in its rooms during trips to meet with managers at his Whyalla businesses.

A spokesperson for administrators KordaMentha confirmed the hotel – believed to have 40 sea or garden view units and restaurant – was among the OneSteel Manufacturing portfolio thrust into receivership alongside the Whyalla Steelworks and mines.

“KordaMentha has taken control of a number of assets as part of the voluntary administration of OneSteel, including the former Foreshore Hotel,” the spokesperson said.

“We can confirm that the hotel continues to operate.”

Whyalla Foreshore Motor Inn – rebranded to The Beach Hotel Whyalla, part of the GFG Alliance’s OneSteel Manufacturing in administration. Picture: Brett Hartwig

Reports from 2018 in The Advertiser showed owners of the formerly named Foreshore Motor Inn, which once catered for the Queen in 1989, had been in negotiations with the Pelligra Group that wanted to build a $45m four-star hotel on the beachfront site.

However, the KordaMentha spokesperson said there were no long-term plan yet for the prime tourism site as “the KordaMentha team is focused on its key role of stabilising the key OneSteel operations in Whyalla”.

KordaMentha was appointed when the state government pushed OneSteel Manufacturing into administration over mounting SA Water and royalties debts, and its first creditors’ meeting in Whyalla this week revealed there were $1.3bn in claimed debts currently being assessed.

A glossy document from 2018 released by Regional Development Australia’s Whyalla branch called for expressions of interest in buying the hotel, saying it offered a “unique opportunity for astute investors” to create either a redeveloped hotel, aged care, or other tourism opportunities.

“With the GFG Alliance, led by Sanjeev Gupta securing the future of the steelworks, the city has seen a new flow of direct investment in sectors such as renewable energy, advanced manufacturing, aviation, defence and tourism,” it said.

The Derhams had owned the motel for 33 years when they tried to sell and their potential buyer Pelligra chairman Ross Pelligra was quoted as saying the “intention is a 4-star hotel with a resort feel” with a four to five storey building.

But local reports showed that when discussions with potential developers saw a settlement date extended 13 times with the Derhams, GFG Alliance stepped in.

It is believed Mr Gupta also had shown interest in buying the now-closed former Whyalla High School heritage building but the sale did not eventuate.

Mr Gupta was seen as a white knight when his GFG Alliance bought the steelworks and mine out of administration in 2017 for a rumoured $700m.

In its prime, Whyalla Mayor Phill Stone said the hotel – that he believes is still more of a motel – was the best place for special events.

“In its heyday it was one of the most popular eating establishments in Whyalla, if you wanted to go somewhere you would got to the foreshore restaurant,” he said.

Now the council believed it would be ideal for an accommodation development with a “million-dollar-view” of the beach and aqua-coloured water.

When Premier Peter Malinauskas was asked what the state government would like to see happen with the Beach Motor Inn a spokesperson said: “The management of OneSteel’s assets are a matter for the administrator.”

Originally published as Whyalla hotel among KordaMentha portfolio as administrators work with creditors for OneSteel Manufacturing steelworks and mines