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Legislative Council - Fifty-Third Parliament, Second Session (53-2)
2016-02-23 Daily Xml
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Arrium

The Hon. D.G.E. HOOD (14:46): I seek leave to make a brief explanation before asking the minister representing the Treasurer questions regarding Arrium steelmaking in Whyalla. In doing so, I note the Premier's ministerial statement today, which I haven't yet had an opportunity to read, so forgive me if some of my questions touch on that issue, but I will read it shortly.

Leave granted.

The Hon. D.G.E. HOOD: Last week, Arrium announced that it returned a half-year loss of $236 million and may need to close, potentially putting some 1,000 (indeed, I understand up to 1,100) jobs at risk. It was reported yesterday that embattled steelmaking and mining company, Arrium Limited, may have struck a deal with GSO Capital Partners to reduce the debt and, hopefully, allow the company to continue steel manufacture for generations to come.

The deal with GSO would provide up to $US927 million in funding to Arrium, but in return GSO will be given share warrants equivalent to 15 per cent of the company, with the potential to increase its stake of security over its assets, its rights and rights to place two members on the board and a default arrangement which could, in essence, hand control of the company to GSO, should it be necessary.

Stockbroker Toby Grimm, on radio yesterday, said that this agreement hands the Whyalla steelworks a financial lifeline, but it does not necessarily secure the plant's future. The Treasurer agreed there was still some work to do to secure Arrium's future. My questions are:

1. What, if any, contribution will the South Australian taxpayer make to ensure the continuation of Arrium, in light of the GSO bailout, or does that simply rule out taxpayer contributions?

2. As noted by the Treasurer, this bailout is just a piece of the puzzle, should it occur. What is the government doing now and planning to do going forward with respect to their future?

3. Is the government remaining in this negotiation process as an active player at the moment, or is it simply a matter of a private sector takeover, in their view?

The Hon. K.J. MAHER (Minister for Employment, Minister for Aboriginal Affairs and Reconciliation, Minister for Manufacturing and Innovation, Minister for Automotive Transformation, Minister for Science and Information Economy) (14:48): I thank the honourable member for his questions. They are, by and large, questions that I'm sure the Treasurer will be happy to answer and I will take them to the Treasurer and bring back a response to that, but I know that the government is committed to doing what we reasonably can to support Arrium and the people of Whyalla. I note that other members in this place and the other place have spoken to me and other ministers about the need to do that.

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