Tuesday, April 12, 2016

Arrium administrator coup - Grant Thornton set to make way for Korda Mentha

The administrator of the failed steel company Arrium is on track to be replaced in a sudden and bloodless coup that could delay the firm's restructure.

The insolvency firm Grant Thornton - which was appointed less than a week ago - is set to be forced out after a deal between banks and unions.

Under the deal, Grant Thornton would be replaced by its competitor Korda Mentha which has been working with the Australian Workers Union in the leadup to Arrium's failure.

Korda Mentha is best known for a range of complex administrations including Ansett which collapsed in 2001.

The ABC understands Grant Thornton agreed to step down quietly rather than being sacked at the first creditors meeting amid threats that bank creditors and the AWU would vote as a block.

The unlikely partnership with the AWU comes after banks owed more than a billion dollars agitated behind the scenes for the appointment of their preferred administrator McGrathNicol, which will work with Korda Mentha on the Arrium administration.

The details of Grant Thornton's removal were being finalised at a Federal Court hearing this morning in Melbourne.

Grant Thornton said on Sunday they were cautiously confident that Arrium’s Whyalla steelworks could be saved and that the indebted business stood a chance of being restructured.

In a statement, Grant Thornton said it had “stabilised the business to ensure to can run as usual” and that they firmly believed the Whyalla works could continue operations.

More to come

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