I certainly don't want or expect it to close up completely. But IMHO, a receivership could help in the business's long term survival by wiping out the debt and forcing some big decisions.
For instance, I expect the first order of business will be the banks direct that Molycop be sold to the best offer. All the money goes to the banks. Employees retained
The receiver will then look at whats left and make some decisions......Does operating Australia's ( and maybe the whole od Asia's) smallest blast furnace make sense? Today ARI can't afford the costs of closing it....but Administration avoids many of these costs. Without the blast furnace and its legacies, the steelmaking and distribution assets are very attractive to the likes of BSL. Sold. Most of the employees retained
As for the mining.....I don't know that the assets are worthwile persisting with. Low volume, low grade, on wrong side of Australia, with poor port access. You're never going to win now that the Pilbara can dig up an extra 1% of better quality, lower cost material. It was different when Rio, BHP and FMG were at full capacity, but not now. If IO long term price settles somewhere in the $30's ARI mining is a cash burn; .....shutdown.
I feel for employees, expecialy those in South Australia. They are victims of earlier, stupid management decisions
ARI Price at posting:
5.1¢ Sentiment: Sell Disclosure: Not Held