GFG Alliance mulls last ditch bid to salvage collapsed Ferretti International

Sanjeev Gupta’s GFG Alliance is mulling a last-ditch bid to salvage its collapsed steel fabrication company Ferretti International after its staggering debts were revealed.

Sanjeev Gupta’s GFG Alliance is considering a last ditch bid to salvage its steel fabrication company Ferretti International Ottoway, which collapsed into administration last month owing unsecured creditors and employees close to $15m in unpaid debts and entitlements.

The debt figure, which includes $12.8m owing to suppliers and other unsecured creditors, and $2.1m in unpaid entitlements owed to more than 100 workers, was detailed at the first meeting of creditors where it was also revealed that GFG was working on plans for a deed of company arrangement (DOCA) proposal.

According to minutes of the meeting, Olvera Advisors, which specialises in assisting companies dealing in crisis management and distressed investments, told creditors that GFG intended to put forward a DOCA for consideration at a second meeting to be held later this month.

Sanjeev Gupta is considering a last ditch bid to save his company.

Olvera Advisors has been retained by entities related to Mr Gupta’s GFG Alliance as it considers options for its Australian operations.

A DOCA, which requires the approval of creditors, acts as a repayment plan that hands back control of a company to its directors.

Ferretti’s collapse has resulted in around 100 job losses across two sites at Wingfield and Whyalla, while 47 workers have been retained to complete several major projects before the company is wound down.

According to the minutes of the meeting, the last two remaining projects are expected to take around four to six weeks to complete.

GFG’s Whyalla steelworks was a key customer of Ferretti, according to administrator Michael Brereton from William Buck, and the future of the company had been in jeopardy since administrators were appointed to the steelworks in February.

Ferretti International Ottoway supplied the steel used in construction of Whyalla’s circular jetty. Picture: Whyalla City Council

Ferretti carried a significant amount of debt, according to administrators, and was dependent on funding from the wider GFG group, which was “unwilling to continue funding the company’s losses” following the steelworks’ collapse.

Whyalla Ports, another Sanjeev Gupta-owned company that formerly operated the Whyalla port and was placed in administration over the weekend, is claiming a $2.6m secured debt owed by Ferretti.

GFG took over the Ferretti business at the start of 2023 as part of its acquisition of the fabricator’s parent company, Singapore-based Aartee Group.

The company specialised in engineering and steel fabrication projects for mining, oil & gas, defence and other heavy industry, counting BHP and ASX-listed Central Petroleum among its major customers.

Administrators were appointed to Whyalla Steelworks earlier this year. Picture: Brett Hartwig

It fabricated equipment used at the Whyalla steelworks, and also supplied the structural steel and balustrading for Whyalla’s circular jetty which opened in 2020.

When administrators were appointed, a GFG Alliance spokeswoman said it would have “no operational impact on the rest of GFG Alliance”.

“Ferretti is a local employer and has played a significant role in supporting the Whyalla steelworks,” she said at the time.

“Its employees have valuable skills and while the continued employment of the Ferretti workforce is a matter for the administrators, it is hoped that some employees will transfer to OneSteel.”

GFG has been contacted for further details about its DOCA proposal.

Originally published as GFG Alliance mulls last ditch bid to salvage collapsed Ferretti International