KordaMentha Restructuring has chosen a Korean consortium as the preferred bidder for the Arrium group of companies that owns significant steel and mining assets.
The consortium is headed by Newlake Alliance Management and JB Asset Management and is supported by the POSCO company.
KordaMentha, the Deed Administrators for Arrium, and investment bank Morgan Stanley, which managed the sale process, will work with the consortium to finalise the sale contract as soon as possible.
This is likely to include discussions with the Federal and South Australian governments on investments in the future of Arrium’s operations in Whyalla.
Arrium fell into administration last year after it racked up debts of £2.4bn due to an over-supply that saw the price of steel spiral.
The final sale is subject to approval by the Committee of Creditors and the Foreign Investment Review Board.
“After a 14-month administration and a nine-month sale process, we are now an important step closer to providing certainty to employees, creditors, suppliers, customers and the Whyalla community,” said Mark Mentha, Restructuring specialist and Partner at KordaMentha.
“We thank all those people for their patience and support during one of Australia’s most complex administrations.”
Mentha said he could not provide further details yet because of commercial confidentiality.
He thanked the UK-based Liberty House group for participating in the sale process.
The Korean consortium and Liberty House were the two short-listed bidders who submitted bids for the entire Arrium group, including Whyalla.
In comments reported by the UK’s Telegraph, Sanjeev Gupta, Executive Chairman of Liberty House, said he was “surprised and disappointed” to lose out in the bidding process.
“We remain willing to step in again should the opportunity arise and pulled together a fantastic team to make a compelling and unconditional proposal which provided certainty of execution and guaranteed a de-risked sustainable future for a very challenging business,” he added.