GFG Alliance’s Whyalla steelworks creditors revealed as UK division faces existential threat

The largest creditors of the collapsed Whyalla steelworks are all companies owned by Sanjeev Gupta, while the amounts owed to the SA government and Port Adelaide Football Club are revealed.

GFG Alliance executive chairman Sanjeev Gupta.

• Steelworks was losing $1.5m a day

The four largest creditors of the collapsed Whyalla steelworks are all companies owned by Sanjeev Gupta’s GFG Alliance, while it has been revealed that the South Australian government is owed more than $30m in unpaid royalties.

A list of creditors lodged with the corporate regulator by KordaMentha, the administrator of failed steelworks owner OneSteel Manufacturing, shows the South Australian government’s Department for Energy and Mining is owed $34.1m and state water utility SA Water another$15.02m.

It is understood the money owed to the department is largely unpaid royalties, while the government is claiming to be owed $40.3m in total, not including the SA Water amount.

Port Adelaide Football Club, which is sponsored by GFG Alliance, is owed $1.26m, while native title holder the Barngarla Determination Aboriginal Corporation is owed $2.88m.

The revelations come as another GFG Alliance company Liberty Specialty Steel is fighting for survival in the UK courts, with a deal to wipe clean GFG’s debts with former financier Greensill thrown into disarray by the collapse of the steelworks.

GFG’s other Australian arm, InfraBuild, is also facing a possible claim by Greensill’s administrators Grant Thornton, which believe they hold security over GFG’s shares in that company.

Premier Peter Malinauskas announcing in February his government had pushed the Whyalla steelworks into administration. Picture: Dean Martin

Mr Gupta’s GFG Alliance group is claiming to be the biggest creditor of the steelworks, which was placed into administration owing $1.34bn in February.

Mr Gupta’s companies, including long steel products maker InfraBuild, are claiming to be owed $536m, the first creditors’ meeting, held last week, heard.

The document lodged with the Australian Securities and Investments Commission this week shows OneSteel Manufacturing owes money to hundreds of companies, ranging from the $92.3m owed to mining contractor Golding Contractors – owner NRW Holdings has put this figure at $113.1m – right down to the $21 owed to UK customs.

The document also indicates that other companies in the GFG group owe OneSteel almost $150m, with InfraBuild Australia Finance owing $71.6m and GFG’s bankrupt Polish arm Liberty Częstochowa owing $6.1m.

The heavy steel plate producer was declared bankrupt by a Polish court in October.

OneSteel Manufacturing owes more than $106m to Whyalla Ports – the operator of the port at the steelworks, which is still owned by GFG, and which briefly shut down recently after contractors were not paid.

NRW has claimed that the more than $100m it is owed by OneSteel is secured over Whyalla Ports.

GFG Alliance’s sponsorship of Port Adelaide Football Club has come under scrutiny following the collapse of the steelworks. Picture: Tom Huntley

The revelation of the identities of the creditors comes as a crucial court date in the UK looms, with reports that GFG Alliance company Liberty Specialty Steel needs to present a restructuring deal to its creditors by late March or face possible insolvency.

Mr Gupta in early February announced that a deal had been struck with GFG’s global creditors over the debts owed following the failure of its financier Greensill in 2021.

This left GFG with a debt burden of about $US5bn at the time.

Mr Gupta said last month that the deal had been agreed to but not finalised, however it is understood that the move by the South Australian government to force the steelworks into administration has derailed the deal as it was structured.

Bloomberg has reported that GFG’s lawyer Marcus Haywood told the UK court last week that the Whyalla decision had made the deal untenable.

“The position in Australia has led to the global settlement no longer being viable,” Mr Haywood told the court.

The court reportedly heard that Specialty Steel would run out of money by May 24, leading to its likely liquidation, should new funding or a restructuring plan not be finalised.

The judge in the matter warned GFG’s lawyers that they would receive no further adjournments of the matter, which will return to court later this month.

Harsco Metals Group in the UK has also filed a winding up petition against Specialty Steel, which is expected to return to court in April.

Separately, a stoush is brewing over the ownership of GFG Alliance’s other major Australian business InfraBuild.

Prime Minister Anthony Albanese talking to workers at the steelworks recently.

The Australian’s UK stablemate The Sunday Times is reporting that Greensill – and by extension its administrator Grant Thornton – claims it holds security over GFG’s stake in InfraBuild, via a debt agreement struck in 2021.

Documents filed with Companies House in the UK show that Greensill Capital UK (GCUK), Liberty OneSteel (MDR) UK and Liberty Holdings Australia entered into a supply chain financing agreement in 2021.

GFG has long held that this contract has no legal weight, flagging the issue in recent years in the Liberty Holdings Australia annual reports.

According to Liberty, GCUK registered a Queensland Law Specific Security Deed against the company on March 2, 2021.

“The SSD purports to grant security to GCUK and the wider Greensill group over the shares of Liberty InfraBuild held by the company’’, the 2023 annual report said.

“The validity of the SSD is denied by the company, the GFG Alliance and the ultimate beneficial owner of the company.

“Also denied is the occurrence of the events of default and the existence of rights of enforcement.’’

A company spokesperson this week again reiterated GFG’s denial that the claim had merit.

“GFG has always maintained that we do not recognise the share charge which is disputed and has no legal basis,’’ they said.

“It was conditional on obtainment of insurance by Greensill and advancement of substantial new monies neither of which materialised. It remained unperfected and with no consideration.’’

On the broader agreement with the company's global creditors, the spokesperson said, “We have recently entered into a term sheet with the Greensill creditors which we are currently negotiating into a binding restructuring agreement covering all disputed debts and claims between the parties’’.

FitzWalter Capital has also lodged a court claim in the US against InfraBuild, demanding repayment of bonds issued by the company.

Originally published as GFG Alliance’s Whyalla steelworks creditors revealed as UK division faces existential threat