Don't think this will happen - by extending out the next creditors meeting until February 29th 2017 and possibly another 3 months later (e.g. May 29th) it has bought the creditors and the administrators (and shareholders) more time. Now there is no rush to sell Molycop as the Vultures were hoping to get for a low price. The first tranche of debts Arrium has to be repaid is not due until July and August 2017 - so as long as they can meet the interest only payments on the $2.8 Billion of gross debt until end of May 2017 they are fine.
Consider this: New tariffs on rebar between 30% and 50%, Tariffs on Molycops operation in Australia only (and the USA and Canada may consider doing the same given conduct of Chinese Steel companies dumping), the steel businesses and Molycop have just gone up in value and will continue to do so.
If EBIT up to 30/6/2016 full financial year for Molycop is A$245 million, and sold on P/E of 7.5 times, you get $1,837 million. 7.8 you get $1,911. And if it can be delayed to March next year, so that figures for 1/7/2016 to 31/12/2016 can be good, you may then up with around the $2 Billion dollar mark. Then Arrium will be out of the shit.
$2.8 Billion gross debt - $2 Billion from Molycop = $800 million gross debt - $350 million in cash = $450 million of Net Debt which can be easily serviced by the remaining 2 mini mills,; key is of course is to get Whyalla and Iron Ore mines back to breakeven so that at least they are not losing any cash from them.
Make no mistake, the extension of the administration time period and tariffs has come just at the right time - it tells the vultures if you want Molycop you put at least $1.80 Billion on the table during the next 4 months or come March 2017 you may be up for $2 Billion, if you want it then. Much better than the $1.50 Billion low ball offer the board got for it in late January 2016.
