Gupta calls in administrator to the parent company of the Whyalla steelworks and Tahmoor colliery

No, not the burning embers of Sanjeev Gupta’s promises to his Australian creditors, it’s the Liberty Bell Bay manganese smelter in Tasmania.

Another one: Sanjeev Gupta has put his Liberty Primary Metals Australia business into administration only a day before the Federal Court was due to hear an application to liquidate the company.

Liberty Primary Metals (LPMA) was once the top of the Australian tree for the lesser half of Gupta’s local business – the assets not included in his Infrabuild steel business, basically.

It was the parent company for the Whyalla steelworks and South Australian iron ore mines, and his Tahmoor colliery in NSW – and logistics infrastructure associated with the three.

Whyalla is gone to KordaMentha to fix and sell, but Tahmoor is still in the hands of its own directors and management – if only just.

Tahmoor is still trying to land the major part of that debt deal through lender-of-last resort Global Loan Agency Services, which is syndicating a loan deal that includes Oaktree Capital.

The first tranche has been paid, but the rest requires a large number of Gupta creditors to again accept promises instead of cash – foolhardy to the point of stupidity these days, you would think.

The NSW government would need to release its security over Tahmoor’s tenements, which were put in place because the colliery owes the state’s taxpayers about $29m.

Trade creditors, including mining contractor RStar – which walked off the job 10 days ago – would need to agree to yet another set of payment plans despite regularly getting short-changed on the last lot.

Its workers’ compensation insurer would need to drop winding-up action over $4.7m in unpaid premiums. And other insurers would need to decide Gupta is a good risk.

At the top of that tottering tree sits LPMA, now in the hands of William Buck’s Michael Brereton, as its newly appointed administrator.

LPMA doesn’t operate any businesses of its own, but it holds the shares of Tahmoor,and Whyalla’s steelworks and iron ore mines.

A Federal Court hearing in Perth will hear arguments on Tuesday that it should be put into liquidation over a $130m debt to ASX-listed NRW Holdings for work done by the contractor at Gupta’s South Australian iron ore mines.

Poor old NRW. Having let Gupta build up more than $100m in debts, it took security over his Whyalla port facility in exchange for another standstill agreement.

And, when it turned out that Gupta didn’t actually own it, chasing the ultimate parent – LPMA – was a last roll of the dice.

It’s small wonder Gupta brought in the administrator ahead of the hearing.

GFG didn’t say what prompted the decision on Monday, only that the administration is meant to “ clear the decks at the corporate level” after South Australian Premier Peter Malinauskas sent in KordaMentha to run Whyalla earlier this year.

The decision, GFG said, won’t change its plans for Tahmoor and the Liberty Bell Bay smelter in Tasmania.

Liberty Bell Bay’s future hangs on support from the Tasmanian government, livid because Gupta appears to have used the smelter as security for the first part of a debt deal to save Tahmoor only a few weeks after agreeing not to, as part of a $20m rescue deal from the Tasmanian taxpayer.

It also means that LPMA probably won’t have to submit its long-overdue annual reports to ASIC.

They were due to be lodged on Monday, under orders from the NSW Supreme Court.