Peter Malinauskas in Whyalla for crisis talks as expert warns steelworks teetering on edge as unpaid bills mount

Premier Peter Malinauskas meets Whyalla creditors as a leading liquidation expert warns unpaid bills have the steelworks teetering on the edge.

A leading liquidation expert is warning GFG Alliance’s debt is a ‘house of cards’ as the Premier and key state government leaders meet local Whyalla creditors for crisis talks.

Nick Cooper, a partner at Oracle Insolvency Services, said news of multiple debts suggested the company’s future is teetering as businesses and the state government consider their options in claiming “tens of millions of dollars” in unpaid bills.

“If a small company files a winding up application and gets paid it could create a stampede,” Mr Cooper said, speaking hypothetically, adding that could risk GFG Alliance ending up in liquidation if its directors do not have a plan to pay growing debts.

• Download the app for your Apple iPhone

• Download the app for your Android

SA Premier Peter Malinauskas and Treasurer Stephen Mullighan on an early morning flight to Whyalla. Picture: NewsWire / Dean Martin

Peter Malinauskas (C), and Treasurer Stephen Mullighan (R) are attending high-level talks on the future of Whyalla. Picture: NewsWire / Dean Martin

“A house of cards is a good analogy. (However,) if it goes into liquidation it will be banks, the secured creditors, that get first bite of the cherry (when it comes to claiming debts), employees get a higher priority as well.”

At a parliamentary committee earlier this week, Treasury Department under treasurer Tammie Pribanic told of GFG Alliance being on a “payment plan” for its $15m SA Water bills but there was no plan to pay off “tens of millions” of dollars owed in royalties.

“Look, I think when you are not paying your bills and you are not paying them for a long time and when you haven’t invested in the steelworks, there are some concerns around solvency,” Ms Pribanic said.

“In this instance, given that it is a big workforce and a lot of industries work off the steelworks, then liquidation would not be a great outcome.”

Premier Peter Malinauskas, Deputy Premier Susan Close, Treasurer Stephen Mullighan and Energy Minister Tom Koutsantonis flew to Whyalla to meet with local leaders and creditors as part of their Upper Spencer Gulf taskforce.

“We’re looking to hear from creditors to understand their position and what their assessment is of GFG’s capacity to pay them into the future,” Mr Malinauskas said.

They planned meetings with the local mayor, creditors, the chamber of commerce and workers’ union.

In another blow to GFG Alliance, Independent MP Frank Pangallo also claimed in the parliamentary committee meeting that the company that provides filtered water to the mine supplying the Whyalla steelworks, SIMEC, has stopped operating and decommissioned its pumps.

“A source called me on the weekend from Whyalla to tell me that the company that provides filtered water to the mine, SIMEC, has now ceased its operation and decommissioned its pumps, so now there is no water to be used in the mining process, which is probably going to slow everything down. They won’t be able to get the ore,” he told a parliamentary committee meeting.

Federal Opposition leader Peter Dutton said he spoke with Premier Peter Malinauskas on Tuesday morning in relation to the situation in Whyalla, which he described as a “difficult and precarious issue”.

“I said to the premier that as a Coalition we’d be very keen to work closely with the South Australian Government to do whatever we can to make sure that we can preserve jobs and that industry in South Australia,” he said.

“It’s an incredibly worrying situation in Whyalla.”

Mr Dutton said as a result of the Albanese Government’s energy policy, it was “harder and harder” for businesses like the steelworks “to survive and operate”.

State Opposition leader Vincent Tarzia is planning a trip to Whyalla next week.

Originally published as Peter Malinauskas in Whyalla for crisis talks as expert warns steelworks teetering on edge as unpaid bills mount