As steelmaker Arrium faces possible closure, some South Australian residents argue against a government bailout.
The steelworks warned it would mothball the Whyalla operations if it is unable to alter its troubled financial situation following the release of their $236 million half yearly loss.
On Monday, Arrium rejected a $AUD1 billion recapitalisation plan from American company GSO Capital Partners. This comes as the steelworks owes funds to 16 banks and if they agreed to GSO’s deal, would only receive 50 cents per dollar for their loans. Arrium has currently stopped their trading on the ASX.
According to the ABC, Whyalla resident John Sowerby said that the closure of the steelworks will devastate their community and believes Arrium itself should solve the problem.
“I want everybody that can possibly help, to help the workers,” he said, “But at the same time I don’t believe any government should be forced to put their hands in their pocket to pull out a company who has been, to me, poorly managed.”
The Australia’s Workers Union held a rally yesterday together with hundreds of Whyalla residents and workers to raise awareness of the issue. This happened during a Senate Economics References Committee inquiry in Whyalla, which aimed to determine the future of Australia’s steel industry.
According to the ABC, South Australia’s Treasurer Tom Koutsantonis flatly rejected the idea of a state government takeover of Arrium, however collaboration should be sought between banks and the government for a solution.
“The idea that the state government could somehow run a steelworks and mine better than the private sector is ridiculous,” he said.
“We are going to an honest broker between the banks, the debt holders and the note holders and Arrium to try and come to a solution.”