An Australian steelworks owned by tycoon Sanjeev Gupta is set to receive a A$2.4 billion ($1.5 billion) government bailout package, following its recent entry into administration due to unpaid debts. On Thursday, Australian Prime Minister Anthony Albanese addressed workers at the Whyalla steelworks in South Australia, stating that the funding—shared between federal and state governments—aims to ensure the plant’s continued operation and represents an “investment in our nation.”
Earlier that day, South Australia Premier Peter Malinauskas, who initiated the administration order, mentioned in a radio interview that he had been in discussions with companies, including Bluescope Steel Ltd., regarding the potential takeover of the steelworks, although he noted that it would not be a “quick transition.”
This bailout highlights the ongoing challenges faced by Gupta’s GFG Alliance, a vast conglomerate employing around 30,000 people across 30 countries. In recent years, several of Gupta’s companies have ceased production, struggled to pay suppliers and employees, and faced insolvency. GFG Alliance stated that it is currently evaluating the implications of the administration order and seeking advice on its options.
Since acquiring the Whyalla steelworks from bankruptcy in 2017, Gupta has faced difficulties in achieving profitability. The facility, which has an annual production capacity of 1.2 million tons, experienced several unplanned maintenance shutdowns last year, and local media have reported payment issues with contractors.
On Wednesday, Malinauskas announced the urgent legislation to place the steelworks into administration, citing advice that the financial situation of the owner was not only deteriorating but likely to worsen. While he did not disclose the exact amount owed in royalties, he indicated it was in the tens of millions of dollars.
In a Thursday radio interview, Albanese did not dismiss the possibility of nationalizing the steelworks if a buyer could not be found, emphasizing the government’s desire for private sector management while ensuring the plant remains operational and employees continue to receive their wages during the transition. The funding includes approximately A$100 million for immediate support and A$384 million to maintain operations during the administration period.
