ARI shareholders should Email PM, page-20

Thanks for the link, the motivation and the inspiration Chippy. Sent this arvo. Please see below

Dear Prime Minister.

I write to you to bring back to your immediate attention the issue of Arrium and Australia's steel industry. As you are aware, Arrium is currently in administration after struggling for years in an unfair market. The steel market was controlled by a neglectful Government which allowed Chinese steel to be dumped into Australia over a prolonged period. Dumping is against WTO guidelines and the Australian Government continually overlooked this.
Arrium represents around 80,000 shareholders, most of whom are hard working Australians, tax payers and voters. Additionally, it comprises around 9000 workers and many more voters in what is literally the only major manufacturing industry we have left in this country. For economic reasons and for national security, a modern economy must be able to produce it's own steel, a vital ingredient for infrastructure and innumerable essential products.
The receiver, Korda Mentha is charging Arrium 1 million dollars a week for administration - a ridiculous amount. Since entering administration, Arrium has been forced to sell it's most valuable, world leading asset under duress for much less than it's true worth, and has also seen it's lenders jump the queue from unsecured to secured creditors with "emergency loans". The legality of this remains to be tested.
Arrium has $1.8 billion in tax losses that carry forward, so if the Financial Investment Review Board (FIRB) allows a sale to overseas interests, it will gift $1.8 bn to a foreign company. There is no guarantee that the steel industry and capability will be maintained over the longer period. There is already talk of a new, experimental steelmaking process mooted for the Whyalla steelworks, that may not even be viable. In addition to the $1.8bn gift, there is responsibility for all the tax losses that will be filed. The total could amount to over $2.5 bn in lost Government revenue.
A reinstated, revitalised Arrium can earn at least $400 million per year ( a conservative figure, given the end to dumping and the commitment to use Australian steel for upcoming rail and other infrastructure) and become debt free in the shorter term. With $400m revenue, Arrium would have a Market cap of 4 billion with a PE of 10. With a potential share price of $1.50, tax losses will be minimised, reducing the loss on Government revenue. If the FIRB allows a cheap sale and gifts $1.8 bn of tax losses, the Government, and all Australians will bear this cost.
Shareholders have promised litigation to recoup their losses and will initiate a class action suing the Government for negligence. In addition to the $2.5bn abovementioned, the total cost to Government will be at least double to over 5 billion dollars.
It is my contention that the Government and Australia would be substantially better off to block the FIRB sale and sack Korda Mentha. By renegotiating with the lenders that are (now secured!) creditors and possibly investing in Arrium through Sovereign wealth funding, we can retain our steel industry and continue to make the best steel in the world. This is the type of thing that makes a country proud - what made Australia the best place in the world to live.
The saving of our steel industry could be a pivotal moment in our country's history in a time when we have already chased away our Auto industry and lost thousands of jobs. We need to retain industry and employment opportunities. We need taxpayers to fund our services and welfare and fuel our nation's progress. Please understand Prime Minister, that not everyone can be a professional or an entrepreneur. Every successful economy ( US, Germany, Canada, UK) enjoys manufacturing and the non skilled and semi skilled opportunities it provides.
In addition to saving billions of dollars, and possibly earning revenue from it's capital investment, such affirmative action may win the next federal election for the Liberal party. Saving the Steel industry, including the Whyalla steelworks may be the best opportunity to win the hearts and minds of South Australians and workers, tax payers and voters Australia wide for decades to come.
This could be your legacy to Australia Prime Minister.

Sincerest regards