Arrium’s major lenders have teamed with the worker’s union to install new administrators to the struggling steel and mining group.
The banks and the Australian Workers’ Union successfully applied in a federal court on Tuesday to have KordaMentha installed in place of Grant Thornton.
The AWU said the appointment of KordaMentha was made possible through collaboration with the banks and represented the best way forward for all parties.
“The AWU looks forward to working constructively with KordaMentha as the new administrator, engaging in a business-as-usual approach to Arrium’s operations, and ensuring we work in the interests of our members,” the union said in a statement.
But South Australian Treasurer Tom Koutsantonis said the move had created more uncertainty for 1600 Arrium workers in Whyalla and thousands more across the nation.
The government had been in advanced negotiations with Grant Thornton’s Paul Billingham to ensure Arrium and its creditors could continue to trade, Mr Koutsantonis said.
“Having forced the issue of voluntary administration, we are now witnessing the banks shamefully squabbling about the choice of administrator,” he told parliament.
“This further disruption by the Australian banks and the continued use of Whyalla’s future as a bargaining chip is distressing for those who are affected by the ongoing uncertainty and constant speculation.”
The SA government would work constructively with the new administrators and other stakeholders, Mr Koutsantonis said.
Grant Thornton said it would do all it could to support the incoming administrators in the transition and expected the impact of the change would be minimal.
Managing partner Paul Billingham said in a statement that the creditors have the right to appoint the firm they wish to represent them in the administration.
“When it became clear that the major stakeholders wished to see a change to a firm not appointed by Arrium, we agreed for the benefit of the process to support an early change as opposed to waiting until the first creditors’ meeting,” he said.
“We believe there is little doubt that the voluntary administration will provide an opportunity to restructure the Australian steel and mining business starting in Whyalla, and also improve the successful East Coast operations.”