Former Orica executives courted for Moly-Cop board

Andrew Larke and Patrick Largier are being courted by Arrium administrators to become directors of its subsidiary.

Arrium’s steel works in Whyalla. Picture: Kelly Barnes

Two former Orica executives, Andrew Larke and Patrick Largier, are being courted by the administrators of Arrium to become directors of its $1.5 billion subsidiary Moly-Cop, indicating plans for a stockmarket listing of the business are accelerating.

Moly-Cop, which makes steel grinding balls used in mining, is said to be the most lucrative part of Arrium’s operations and administrator Korda Mentha is considering a divestment of the asset, either through an initial public offering or a trade sale, to help pay down its $2bn-plus debt load.

Last week it hired investment banks Macquarie Capital and UBS to join its existing adviser Deutsche for a potential IPO. The division proved popular with prospective equity investors during earlier educational briefings on the business.

Potential board members are now being interviewed, according to sources.

While Mr Largier and Mr Larke are said to be candidates for boardroom roles, it is understood that finding a high-profile board member from an Australian-listed company to chair Moly-Cop is not proving easy.

One of the reservations from the candidates has been that Moly-Cop is being spun out of a troubled entity that owes lenders more than $2bn, and they fear the legal repercussions.

Analysts say Orica chairman Malcolm Broomhead would have been an ideal choice for the Moly-Cop chairman role, given he previously chaired Asciano, which is being taken over by Brookfield and Qube Logistics.

He is also a director of BHP Billiton and was a board member of struggling equipment rental business Coates Hire.

Mr Larke is chairman of IXOM, the former chemicals division of Orica that he ran before it was snapped up by private equity group Blackstone.

Mr Largier was chief executive of the DuluxGroup division when it was part of Orica.

Prospective equity investors have thrown their support behind the float of Moly-Cop, applauding its strong management team and 80 per cent global market share.

Korea’s Posco and Brookfield circled Arrium’s steel operations when options were being explored last year.