The listed contractor said it required “regular weekly payment instalments” and provided those services up until February 19 when administrators at KordaMentha were called in at OneSteel. Credit: DAVID MARIUZ/AAPIMAGE
OneSteel Manufacturing creditor NRW was demanding weekly repayments back in December to keep providing mining services after the now-collapsed South Australian steelworks fell behind on its dues.
Belmont mining and civil group NRW handed down its financials after-market on Friday over a week late due to last-minute accounting complications linked to its embattled customer Whyalla steelworks.
The half-year accounts reveal further details of the operation’s woes.
NRW’s subsidiary Golding, which had been servicing iron ore mines feeding the steelworks since 2020, ceased its services at the site on November 7 last year after OneSteel “failed to pay Golding satisfactorily” per their contract according to ASX filings.
NRW indicated in its financials that $82.5 million had been racked up in receivables when it agreed to restart work on December 6 on the condition OneSteel cough up $4 million and provide a guarantee for $70m.
Penalty interest rates were also cranked up from 5.3 per cent to 13 per cent.
The listed contractor said it required “regular weekly payment instalments” following the restart, and provided those services until February 19 when administrators at KordaMentha were called in by the South Australian Government.
NRW is owed over $113 million as at that date and has continued to provide services to the operation on the guarantee from administrators that it will get paid for the work it does from here on out.
But the Jules Pemberton-led contractor has not set aside any provisions to cover losses from the work done should it fail to recover the cash through securities held over OneSteel.
The chief executive assured investors on Friday that NRW had “sufficient value” to recover the outstanding amounts.
“We have various options regarding the enforcement of this security and will make a decision on the path forward based on the best interest of ours shareholders and other stakeholders. There has been no financial impact recognised during the period, with no specific allowance associated with amounts due, being recognised for the period,” he said.
That’s despite NRW noting in its financials that “a degree of uncertainty exists on the potential timing of realisation of value associated with the group enforcing its rights under the existing security arrangements.”
The cash owed by OneSteel has been treated as a non-current receivable on the basis it could take up to 12 months to resolve OneSteel’s woes.
NRW is without a permanent chief financial officer after Richard Simons resigned in January.
Creditors have been offered up to $50m each in assistance payments — well short of the money owed to NRW.
The South Australian Government seized the financially-struggling South Australian operations from Indian tycoon Sanjeev Gupta last week and put them in the control of insolvency experts from KordaMentha after falling behind on repayments.
The contractor delivered a $51.7 million profit for the six months to December 2024, improving on a $41.6m profit delivered in the six months to December 2023.
A suspension in NRW shares has been lifted and the stock will resume trading on Monday.
Shares last changed hands at $3.28 apiece.
NWH Price at posting:
$3.29 Sentiment: Buy Disclosure: Held
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