Steel and Mining Group Arrium of Australia Heading Into Administration Due to Heavy Debts

Arrium, the international mining and materials company listed on the Australian Stock Exchange, has collapsed into administration after failing to secure a funding deal with its lenders. The company suspended trading in its shares this week. Arrium has a total debt of more than $4 billion and owes about $2.8 billion to lenders, $1 billion to suppliers and about $500 million to staff. Administrators Grant Thornton has been appointed to run this troubled iron ore and steelmaking company. Lenders have rejected a $US927 million ($1.2 billion) funding deal with Blackstone fund GSO Capital Partners as it would have resulted in the lenders incurring a severe cut on their loans.Grant Thornton has assured that nothing will be shut down, but called for a national approach to the company’s long-term prospects. They have guaranteed that it would be normal business across the group’s operations, but would carry out an urgent and comprehensive review of the core Australian steel and mining businesses. This announcement has resulted in more than 6,700 employees being under the cloud across the country.

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