NRW Holdings Ltd has flagged a A$113.3 million impairment provision linked to its exposure to the embattled Whyalla Steelworks facility, following legislative moves by the South Australian Government that could jeopardise the contractor’s secured interest in port infrastructure assets.
The company said it is “extremely disappointed and concerned” by the state’s newly proposed Whyalla Steel Works (Port of Whyalla) Amendment Bill 2025, which could invalidate key lease and security arrangements between its subsidiary Golding Contractors, Liberty Primary Metals Australia Pty Ltd (LPMA), and Whyalla Ports Pty Ltd.
The dispute stems from earlier this year, when on February 19 the South Australian Government moved to place OneSteel Manufacturing Pty Ltd into administration, taking the Whyalla steelworks out of the control of UK-based businessman Sanjeev Gupta and his GFG Alliance group.
On February 25, NRW advised that through Golding Contractors it had obtained a guarantee and indemnity from both LPMA and Whyalla Ports, as well as first-ranking security over the assets and shares of Whyalla Ports, in relation to outstanding payments owed by OneSteel.
The steelworks was revealed in March to hold debts of A$1.35 billion with only A$8 million remaining in cash, according to KordaMentha, the appointed administrators.
In a market update on Thursday, NRW said the proposed bill, announced by Premier Peter Malinauskas, would retroactively void the lease granted by OneSteel to Whyalla Ports and declare infrastructure on port land to be part of the land itself, not personal property.
“The Ministerial Statement says the Proposed Bill has been drafted to clarify the status of the land that is the subject of the Whyalla Ports lease,” NRW said. “The likely effect of the Proposed Bill is to cause the lease agreement granted by OneSteel to Whyalla Ports to have never had legal effect from the beginning.”
“The Ministerial Statement also states the Proposed Bill will clarify that the creation of an interest in certain infrastructure constructed on the port facilities is void and that the infrastructure forms part of the land and is not personal property.”
Although Golding retains a first-ranking security interest over Whyalla Ports’ assets, NRW said, “it is clear the bill will enable OneSteel to usurp that personal property by declaring it void and part of the land, with ownership vesting to OneSteel without any mention of compensation to Whyalla Ports.”
“NRW is extremely disappointed and concerned that the proposed and unprecedented intervention by the South Australian government will seriously impair and undermine Golding’s security over Whyalla Ports. Further, the South Australian Government’s sudden intervention will in effect determine certain issues that are before the Federal Court for determination at a trial due to commence in less than three weeks’ time,” the company added.
Federal Court proceedings initiated in April are seeking to declare the lease void and unenforceable. NRW noted that if this relief is granted, it would “seriously undermine Golding’s security in respect of Whyalla Ports.” Golding has since been granted leave to join the proceedings, with a trial scheduled to begin on 2 June.