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“Having now cleared the unexpectedly high hurdle with the Boulder Steel shareholders, we do not realistically see anything preventing us from completing the EIS [environment impact statement] and commencing discussions with potential major project partners,” GSPL chairman Paul Sundstrom told Steel First on Tuesday September 16.
Last week, Australian Securities Exchange (ASX)-listed Boulder Steel officially moved out of administration after key resolutions related to an early rescue plan were approved by its shareholders.
As a result, Boulder Steel’s formerly named Gladstone Steel Plant Project (GSSP) has been renamed Euroa Steel Plant Project Pty Ltd (ESPP), and its equity has been split equally at 50:50 between Boulder and GSPL.
Created out of the original rescue group that took the whole project out of administration, GSPL now manages ESPP and “there are clearly agreed mechanisms” for its equity to “increase as appropriate” in the future, Sundstrom told Steel First.
He said it was “an unexpected rough ride” to gain approval from some of the shareholders.
“In the end it involved working solidly around the clock for over five weeks, with a solid team in Australia, and a smaller team in Germany,” Sundstrom said.
Following the official move out of administration, Boulder Steel will pass through a recapitalisation that is being managed by Otsana Capital, which specialises in IPOs and corporate restructuring of ASX-listed companies.
GSPL will also look to raise $1.3 million to accelerate the EIS work to “maximum pace” in order to complete it “as soon as possible”, according to the executive.
The company will also try to bring in to the project a “cornerstone investor” which could enable ESPP to start several works in parallel with the EIS, instead of waiting until it approves the EIS and joint venture agreements with partners.
“This is seen as very important, in the light of the two letter of intents for offtake signed back in June, and could well mean selling a piece of the project more cheaply than we would otherwise be willing to do,” Sundstrom explained.
The two offtake agreements, one with China’s welded pipe producer Panyu Chu Kong and the other with an unnamed Philippine company, comprise the sale of as much as 70% of the planned 5-million-tpy semi-finished steel output.
Gladstone Steel Pty Ltd (GSPL), a new company set up to manage a 5-million-tpy semi-finished steel project in Australia formerly fully-owned by Boulder Steel, is proceeding as planned with the venture.