AWU Members may encounter factually incorrect reports in relation to the Arrium Administration on social media. If you see anything suspicious or misleading please speak with your Delegate or AWU Official to ensure you have the correct information.
5 July 2017
ARRIUM UPDATE - Arrium, Whyalla Saved!
Sale of Arrium confirmed
The Australian Workers’ Union is pleased to announce that the GFG Alliance has been confirmed as Arrium’s new owner. This is an outcome that we’ve been working towards for 15 months, and we are excited to share the news.
Australian Workers’ Union national Secretary Daniel Walton said “This is the outcome we have been working so hard toward for well over a year. This is the certainty we wanted to deliver for workers and their families.”
This is great news for Whyalla, and this announcement will provide confidence for over 2000 AWU members working at the site.
We are excited know that Arrium’s new owner has a reputation as a good corporate citizen, with a responsible, long-term vision of success.
They have invested strongly in Europe and the UK, and are committed to investing in Australia’s steel industry. We believe that GFG will provide the right backing for Arrium, and see the company evolve over time.
Daniel Walton said the GFG Alliance is entering the agreement with a “clear and commonly understood vision of how Arrium, and Whyalla, can thrive into the future.”
The finalisation of the sale will take place over the coming months, with the transfer of ownership to be completed by the end of August. We know that it has been a long process of negotiation, and we are eager to begin a new chapter for Arrium.
Your union is committed to ensuring that the sale is finalised as quickly as possible, and that the transition to new ownership will happen smoothly.
We will keep you updated on any new developments, and we hope you join us in celebrating this excellent news.
15 June 2017
ARRIUM UPDATE - Arrium, Whyalla now close to salvation
Arrium sale update
As you would be aware, the Administrator has now selected a preferred bidder for the sale process. It is anticipated that this process will be concluded in the coming months.
The Korean Consortium has been selected due to a superior offer that involves a $1.4 billion investment into the Whyalla steelworks and a positive plan for the company more generally.
The Korean bid relies on the implementation of POSCO licensed technology known as FINEX and a new gas-fired power plant.
Importantly, a successful implementation of FINEX technology – a process that removes coking coal and is less emissions intensive – will provide the Whyalla steelworks with at least another 30 year lifespan. This investment will secure the economic future of our members, the township of Whyalla and the Australian steelmaking industry.
Excess power generation from the new plant will support the South Australian electricity grid more generally.
East Coast businesses
The Korean consortium have committed to working with our Union in good faith to ensure a positive outcome for all employees of Arrium.
We will work constructively with the company throughout bargaining to ensure the interests of our members are protected and enhanced.
The Korean Consortium requires government commit to meeting some maintenance costs over a five-year period while the company invests $1.4 billion into building the FINEX steelworks and an off-gas power plant.
Through the continued cooperation of union employees, Arrium’s creditors, and the administrator, a positive outcome is now eminently achievable.
Your union will continue to lobby private and publicly for state and federal government support to the sales bid through some final funding and approval hurdles.
Your union is calling on the South Australian and federal governments to save Whyalla by working constructively to meet the requirements of the Korean Consortium, which has been announced as the preferred bidder for Arrium.
We’re nearly there - a message from your National Secretary, Daniel Walton:
"This has been a complex, lengthy and stressful process. An administration is extremely difficult for members, their families and local communities – your resilience during this time has been incredible.
I thank all those involved for their hard work and patience in getting us to this point.
Australian steel has a viable, prosperous future, and can continue to support thousands of excellent jobs, along with whole communities. But that will only happen if our government is willing to support industry.
Your union will work overtime to ensure this support is forthcoming.
I ask for your continuing support and patience as we enter this final stage and secure the future of Arrium together. We will update you all as soon as possible.
We are always stronger together."
02 June 2017
ARRIUM UPDATE - Official Offers
8 March 2017
ARRIUM UPDATE - Arrium Administration Update No. 14
All interested parties submitted final bigs on 15 February 2017. The Administrator has confirmed that there are now two shortlisted bidders remaining. The Administrator has indicated that both of these bidders intended to purchase the entire company in ‘one-line’.
These bids remain confidential and commercial in confidence.
The bidders will now enter final negotiations with the Administrator.
The two bidders will have firm discussions with the Federal and State Governments in order to confirm their plans for capital investment.
Both bidders will then be asked to submit unconditional offers that can be accepted or rejected by the Administrator.
It is anticipated that this process will be completed by 30 June 2017.
Once more detail is available this will be shared with members.
We note that this is a difficult period for all affected members and their families. If you require further support during this time please contact your relevant Delegate or Official for further assistance.
4 November 2016
ARRIUM UPDATE- Second Meeting of Creditors, 4 November 2016
What happened at the meeting?
The Deed of Company Arrangement (DOCA) was approved by a majority vote of the Creditors.
The key objectives of the DOCA is to:
- Maximise the chances of as many of the Arrium Group Companies’ businesses continuing in existence.
- Provide a better return to creditors of the Arrium Group Companies as a whole, than would result from winding up of the Arrium Group Companies.
- Provide flexibility for a sale and recapitalisation of the Arrium Group Companies in terms of the structure of the businesses and assets.
- Provide for a cost efficient and timely mechanism for the sale and recapitalisation of the businesses of the Arrium Group Companies, the novation of liabilities of the Arrium Group Companies and the management of proofs of debt, determination of claims and payment of distributions to creditors.
- Provide that creditors can be no worse off than if the Arrium Group Companies were placed into liquidation.
How did the AWU vote?
The AWU voted in favour of the proposed DOCA.
Did the AWU ask any questions of the Administrator?
The AWU asked for an update on the investigation into the behaviour of Directors in the lead up to the Administration. There are concerns that the company may have traded while insolvent and that Directors breached their legal duties.
The forensic investigation is ongoing and will proceed during the sale process. We will provide updates on this as they come to hand.
What happens next?
The company will now continue the sales process.
How will the sale process proceed?
The Administrator has approved a short-list of preferred bidders. You can expect that representatives from these bidders will now engage in a detailed sales process. This may involve visits to your site.
It is anticipated that the sale process will be finalised in 2017.
Has Molycop been sold?
Yes. The company was sold for $1.23 billion.
Where does the money from the sale of Molycop go?
The money will be used to pay down debts. Certain creditors are entitled to have their debts paid with the proceeds of the sale of Molycop ahead of others as a result of security.
Are my entitlements still secure?
Employee entitlements are completely secure and remain at the front of the queue. All entitlements will be transferred to a new owner in the event of a sale. In the event that no sale occurs – which is considered extremely unlikely – workers will remain at the front of the queue. The AWU will continue to monitor this and will provide updates as they come to hand.
However, please note that the Union strongly advises all members in order to receive their entitlements they must remain employed with the company. Members should not voluntarily cease their employment with the company until the sales process has been completed. If you have any questions about this, please contact your local Organiser.
Upcoming bargaining talks – “East Coast”
East Coast Bargaining talks were placed on hold as a result of the Second Meeting of Creditors being moved forward. Your Union will make contact with the Administrator next week to further our discussions. We will update you on this process as soon as possible.
Further information and support
Members and Delegates seeking further information or support about these matters should contact their local Organiser.
27 October 2016
ARRIUM UPDATE – Second Creditors Meeting, 4 November 2016
What is happening?
The Second Meeting of Creditors will convene to vote on a number of decisions on the future of Arrium.
Who is representing me at the meeting?
As occurred at the First Meeting of Creditors, AWU National Secretary Scott McDine will represent all AWU members automatically at this meeting. Scott will vote on your behalf at the meeting.
Do I need to sign a proxy form?
No. Scott McDine will represent you unless you wish to represent yourself at the meeting.
Where is the meeting happening?
Date: 4 November 2016
Time: 12:00 pm (AEDST)
Location: SMC Conference & Function Centre, 66 Goulburn Street, Sydney
Registration for the Second Meetings of Creditors will commence at 10:00am (AEDST).
An audio of the Second Meetings of Creditors will also be held in Whyalla, South Australia. KordaMentha staff members will be present in Whyalla and creditors will be provided an opportunity to vote on the resolutions.
Date: 4 November 2016
Time: 11:30 pm (ACDT)
Location: Palms Function Centre, 100 Mcdouall Stuart Ave, Whyalla Norrie SA”
There will also be audio again in Newcastle (with no voting capability). Details of this will be provided.
What is happening at the meeting?
The purpose of the Second Meetings of Creditors is to allow creditors to vote on the future the Arrium Group Companies subject to Voluntary Administration. The options available to creditors include:
- the Arrium Group Companies to execute proposed Deeds of Company Arrangement
- the administrations of the Arrium Group Companies end (and are handed back to the Directors), or
- the Arrium Group Companies are wound up (i.e. placed into liquidation).
What is the likely outcome from these options?
The Administrators will be recommending creditors vote in favour of the proposed Deeds of Company Arrangement. This will allow for a sale process to occur.
What is a Deed of Company arrangement?
A Deed of Company Arrangement is a binding arrangement between a company and its creditors governing how the company’s affairs will be dealt with. It aims to maximise the chances of the company, or as much as possible of its business, continuing, or to provide a better return for creditors than an immediate winding up of the company, or both.
A Deed of Company Arrangement binds all unsecured creditors, even if they voted against the proposal.
What are the particular terms of this Deed of Company Arrangement?
The intention of the Deeds of Company Arrangement proposals are to:
- Facilitate a value-maximising sale of the Arrium Australia business operations (as a whole)
- Preserve the status quo and creditor claim
- Deliver an efficient and cost effective distribution mechanism for paying creditors in what is a complex corporate structure.
What about my entitlements? Are they safe?
Yes, they are safe. The proposed Deeds of Company Arrangement do not impact employee entitlements. The employee’s current priority will be maintained at the front of the queue.
The Administrators consider that the Deeds of Company Arrangement will facilitate a sale of the Arrium Australia business as a going concern which will also protect the employment and entitlements of employees.
Will we be consulted on the sales process?
Yes, the current Committee of Creditors process will continue. Your Union is represented at these meetings.
When do we expect the sale process to conclude?
The Administrator believes that the sale process will conclude in the first part of 2017. Final offers for the company are due by December 2016.
What happens next?
We will keep you up to date and informed about the outcome of the meeting. If you have any questions we encourage you to visit www.awusteel.com.au or speak to your relevant Organiser.
25 October 2016
Second Creditors Meeting
Please be aware that the Second Creditors Meeting for the Arrium Administration is likely to be scheduled for Friday 4th of November 2016.
The meeting has been moved forward due to the sale process and the Administration moving faster than expected.
Purpose of Second Creditors Meeting
This meeting is typically referred to as the ‘decision meeting’.
At this meeting the potential options to consider by Creditors are a total liquidation, an approval of a Deed of Company Arrangement (DOCA) or simply for the Administrators to hand the company back to Directors.
At this meeting the following will option will be put forward by the Administrator for consideration:
* Consider and approve the Deed of Company Arrangement (DOCA) – the document that outlines the details and structure of the proposed sale of Arrium.
In the event of no decision at this meeting, it is possible for the decision to be deferred to a further meeting - however this is considered unlikely.
An official notice of the meeting will be provided seven days before the meeting itself. We will provide this notice to members once it is received.
The proposed DOCA will be circulated as part of this notice.
Member representation at meeting
As per the previous Federal Court Order of 11 April 2016, AWU National Secretary Scott McDine will automatically represent all AWU members via proxy at the upcoming meeting.
This is exactly the same process that occurred at the First Creditors Meeting.
Members will not be required to fill out proxy forms in order to be represented at the meeting.
AWU National Secretary Scott McDine will vote on behalf of all AWU members at the meeting.
Members may choose to opt out of this form of representation and represent themselves.
What happens next?
Presently MolyCop is presently being made for sale as a separate entity. Deutsche Bank is managing this sale process. The sale process for MolyCop will continue irrespective of any Creditors Meeting outcomes.
Morgan Stanley is managing the sale for the remainder of the Arrium business.
Initial bids for the purchase of the Arrium business currently in Administration (the 94 entities) are due in the coming days.
Should the Second Creditors Meeting approve the process, it is likely that the sale for all companies (Arrium 94 entities and Molycop) will be finalised sometime in December 2016.
We will provide more information about this process and any potential bids as it comes to hand.
East Coast Bargaining
On 6 October the company rejected the endorsed position of the East Coast Group (all sites excluding Molycop and Whyalla) put forward by the union on 3 October 2016.
As a result, your union will continue to meet with the company.
The next meeting with the company is scheduled for 19 October 2016. AWU Delegates and Officials will be in attendance at this meeting.
We will update you regarding the outcome of this meeting.
If you have any questions regarding this process, please talk to your local Delegate or Organiser.