Grant Thornton was appointed administrators today after the board of Arrium chaired by Jerry Maycock (appointed in late 2014), concluded it was unable to further guide the debt-laden company in the challenging business environment for steel companies.
In February, Arrium managing director Andrew Roberts – who was appointed to the top job in 2013, after having been with the company since 2000 – reported underlying earnings in the first half of the current financial year had fallen nearly 40% to $A115 million, while net debt had risen to nearly $2.1 billion – up from $1.75 billion six months earlier.
Arrium’s business principally comprises the three segments of mining consumables, iron ore mining, and steel making.
The mining consumables business is the best of the three, while Arrium’s iron ore and steel businesses are based around operations in South Australia including the steelworks at Whyalla.
Arrium exports about 9-10 million tonnes per annum of iron ore, and had been working on lowering its breakeven price to $US45 per tonne.
A recapitalisation plan was unveiled in late February with GSO Capital Markets.
Grant Thornton said Arrium would continue to trade on a “business as usual” basis, with the first meeting with creditors set down for April 19.
Arrium shares were at about A2.2c at the end, capitalising the company $64 million. Shares were worth nearly 20c 12 months ago, and were fetching just under $6 in mid-2008.
