Dear Daniel,
Firstly, congratulations on your promotion to one's of the nation's pivotal trade union roles.
I am a member of Arrium Shareholders United (ASU), a group of 420 members representing 160 million shares. Our members are predominantly mum and dad investors, many are current employees of Arrium/Onesteel and are also union members and shareholders.
Our motivation is to keep Arrium Australian owned, protect Australian jobs and employees’ terms & conditions of employment and maintain shareholder value.
We are highly concerned that KordaMentha are continuing to promote a sale process of Arrium Australia, despite highly favorable market conditions that translate into a highly profitable last 6 months, with projections for a bumper 2017.
It defies any rationale argument that Arrium remains under a DOCA, that KordaMentha invoices a cool 1 million a week to administer.
Furthermore; Morgan Stanley will pocket a 100 million in fees for managing a totally unnecessary sale process that will result in another Australian icon being sold overseas.
We are aware that at the start of Arrium's administration your union's key focus was to ensure there was sufficient funds available for employee entitlements if bankruptcy could not be avoided.
With the vastly improved business viability of Arrium Australia, the daily feedback we are receiving from union members across the country is that they now seek a strategic approach from their union leaders to ensure Arrium jobs and working conditions are protected. That Arrium Australia is restructured, kept Australian owned and relisted on the ASX.
Your Arrium union members read newspapers and speculate daily on their employment futures. They are aware if Liberty House buys Arrium Australia, there is a strong likelihood of support functions being shipped offshore resulting in large numbers of redundancies. Furthermore; given Liberty House's dubious corporate governance track record they are likely to renegotiate your EA's as soon as it is legally possible, stripping out hard fought terms and conditions.
The alternative, is also not a positive scenario for Arrium union members if Bluescope "cherry pick" and buy key East Coast Arrium assets. This would also result in widespread redundancies with duplicate business units closed. Also, how would Whyalla stand alone under this arrangement?
Furthermore; it is estimated that more than 50 percent of Arrium full time employees/union members are shareholders that risk having their share scheme savings being wiped out under the current DOCA arrangement.
The combined leadership of Arrium/Onesteel unions are in a strong position to stop the sale of Arrium Australia and encourage the key lenders to refinance the existing debt which can easily be serviced. Your position on the creditors committee is pivotal and has the potential to influence the big 4 banks to adopt this approach. A new board could then be formed with AWU representation.
We have been extremely proactive communicating with lenders, ASIC, KordaMentha, politicians and the media with mixed results, but what would really “tip the scales” is the strong support from unions and its rank and file members, to not only prevent the sale of Arrium Australia but to participate in the planning of its future.
We would be delighted to meet with you to discuss our plans and ideas.
kind regards,
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