NEWS

POSCO says not a bidder for Australia's Arrium steelworks

Thursday, Nov 03, 2016

South Korea's POSCO said on Thursday it has not bid to acquire Australia's Arrium Ltd steelworks, but is trying to sell the group technology, differing from comments by a senior Australian minister that said POSCO is in the running.

"POSCO has not participated in bidding to buy Arrium. We are interested in selling our FINEXT technology to Arrium," a POSCO spokesman told Reuters.

The technology removes the need for a blast furnace to make steel, a key step in reducing costs.

The POSCO spokesman's comments differ from a statement that Australia's industry minister Greg Hunt issued earlier on Thursday after meetings in South Korea that said POSCO has expressed a "strong desire" to acquire the steelworks, providing a lifeline as Arrium struggles to stay afloat and pay off debts.

"POSCO briefed me on their future vision for Whyalla - where the plant not only continues current operations, but grows significantly," Hunt said.

"They don't want Arrium to just be competitive domestically. They want Arrium to be globally competitive," Hunt said.

A spokesman for Hunt told Reuters that the minister stands by his earlier statement.

Arrium in April descended into voluntary administration, a precursor to bankruptcy, after creditors rejected a $927-million bailout proposal by a private equity group that would have paid no more than 55 cents on the dollar for their claims.

Hunt said POSCO outlined plans to introduce new technology to Arrium's Whyalla steel works and build a new power station.

KordaMentha, the private corporate restructuring firm handling the sale and dealing with creditors, has shown a preference for a buyer-takes-all sale of Arrium's assets in Australia that includes an east coast steel business, the Whyalla steelworks, a Southern Ocean port and an iron ore mine.

A meeting of Arrium's creditors is scheduled for Friday in Sydney.

The creditors committee includes representatives from Australian lenders Commonwealth Bank, National Australia Bank, Westpac and ANZ Bank

Total unsecured debt across all lenders and noteholders sits at around $2.8 billion.

The Australian businesses have been separated from Arrium's profitable Moly-Cop unit, which makes steel balls to grind ore and operates mostly in the United States and Latin America.

The sales price for Moly-Cop is said to be between A$1.5 billion ($1.15 billion) and A$1.6 billion and the buyers have narrowed to private equity companies KPS Capital Partners or American Industrial Partners, according to the Australian Financial Review newspaper.

 

Source : reuters.com

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