After a nine-month sales process, a South Korean private equity consortium, led by Newlake Alliance and JB Asset Management, has been named as the preferred bidder for steelmaker Arrium.
The Australian steelmaker is currently in administration and is being managed by KordaMentha, who also considered a rival bid for the asset from Liberty House, the metals firm run by UK-based Sanjeev Gupta.
Mr Gupta did not close the door on potential negotiations in the future: “I am surprised and, of course, disappointed to hear the news that we are not the preferred bidder for the Arrium business. Naturally we remain willing to step in again should the opportunity arise.”
“After a 14-month administration and a nine-month sales process, we are now an important step closer to providing certainty to employees, creditors, suppliers, customers and the Whyalla community, said Mark Mentha, administrator.
“We thank all those people for their patience and support during one of Australia’s most complex administrations.”
New steelmaking technology, developed by Posco, produces molten iron directly using iron ore and non-coking coal rather than the traditional blast furnace steelmaking process, and reports indicate that the South Korean consortium plans on investing up to A$1bn in licensing it from Posco at the Whyalla steelworks.
Future negotiations between the consortium, administrators and government officials on the final deal are forecast to be complex given the requirement for public investment.