A wealthy businessman’s fall from grace has caused ripple effects across the world, and in Whyalla the feeling is they are “not going to be immune from the contagion”.

Here’s what it could mean for Australia’s second largest steelworks.

What’s going on?

Australian billionaire Lex Greensill of Greensill Capital has filed for insolvency, leaving businesses across the globe in the lurch.

One of those is Sanjeev Gupta’s GFG Alliance — owner of the Whyalla Steelworks.

Locals are hanging tough, but with news of the insolvency of Greensill Capital, its Whyalla operation and the city itself could be exposed.

The Whyalla Steelworks is the lifeblood of the city of about 20,000 people, and it’s seen tough times before.

It went bust in 2016 when Arrium went under, before being purchased in 2017 by Sanjeev Gupta’s global juggernaut.

Lex Greensill’s Greensill Capital was valued at $9 billion last year and appointed administrators in England and Australia this week.(

Supplied: Greensill Farming Group


Since then GFG has poured money into the steelworks, helping turn its fortunes around using money from Greensill Capital.

But with Greensill going belly up, that partnership and cashflow is no more.

A $1 billion dollar transformation of the ageing steelworks was part of Sanjeev Gupta’s grand plan when he took over the plant.

Now that ambitious plan and the plant’s operations face an uncertain future.

How are locals feeling?

Local MP and lifelong Whyalla resident, Eddie Hughes, said the complexity of the financial arrangements between GFG and Greensill were still being thrashed out.

“It’s an evolving situation,” Mr Hughes said.

He was not confident that the $1 billion regeneration plan would go ahead “anytime soon” but said locals were feeling optimistic despite the challenges.

“People are still going to work, still being paid,” he said.

“What might bode well in the long-term for the transformation plan is that the Australian operations, including here in Whyalla … are doing well.”

The Whyalla Chamber of Commerce this week said said it was business as usual for the town despite the uncertainty.

“I’m sure there’ll be other funding options being investigated now if they are not already being sourced,” chamber head Malcolm McLeod said.

But the extent and complexity of the financial relationship between GFG and Greensill is mostly unknown.

What does it mean for the Whyalla Steelworks?

It is still unclear.

South Australian Minister for Energy and Mining, Dan van Holst Pellekaan, said he had spoken with Mr Gupta and company representatives this week.

A $50 million offer of State Government support was made to GFG Alliance by the former state Labor government, but the money was yet to be provided.

“For the right projects, that’s still on the table — our Government stands ready willing and able to deliver on that and to support this company,” he said.

Premier Steven Marshall said he too had spoken with Mr Gupta and said he was more focused on the long-term transformation of the plant rather than providing immediate cash-flow.

“We’re certainly monitoring the situation very carefully, obviously we are concerned there are a large number of people reliant on that steelworks,” Mr Marshall said.

“We’re doing everything we can to support the business as it restructures its finances.”

Mr Marshall said he had updated the Prime Minister Scott Morrison and Industry Minister Karen Andrews on the situation.

South Australian Opposition Leader Peter Malinauskas said state and federal governments should be making preparations for all possible outcomes.

“We should be cognisant here of the scale of calamity that would be associated with that steelworks closing down as a result of financial decisions being made by other parties overseas,” Mr Malinauskas told ABC Radio Adelaide.

“This would represent a very serious economic threat to the state and more importantly a social catastrophe for the people of Whyalla.”

In a statement, GFG Alliance said it remained “operationally strong” despite the challenges Greensill’s insolvency created.

The Whyalla Steelworks is the city’s major employer.(

ABC News: Matt Coleman


“We have adequate funding for our current needs,” it said.

“Discussions to secure alternative long-term funding are progressing well, but will take some time to organise.”