Billionaire Sanjeev Gupta’s sprawling GFG Alliance no longer runs South Australia’s Whyalla Steelworks after legislation rushed through state parliament on Wednesday.

The SA government has appointed advisory and investment firm KordaMentha to administer the steelworks, to stabilise operations and explore a possible sale to a new owner.

SA Premier Peter Malinauskas said the government was not contemplating owning the Steelworks.

“For months, my government has been carefully planning a strategy to address the challenges unfolding at the Whyalla steelworks,” he said.

“Throughout that period, we gave GFG every opportunity to make good on its promises and to bring creditors back into terms. It has failed to do so.”

The government said workers and contractors would be paid and the administrators would be able to trade on and pay debts incurred during the administration period.

It follows months of uncertainty for workers at the South Australian steelworks and suppliers to the complex. It has racked up sizeable debts to creditors, including the state government, which is believed to be owed “tens of millions of dollars”.

“Employees of the steelworks will now have their futures assured,” Malinauskas said.

“During the administration, workers and contractors will continue to do their job and will be paid with the benefit of a government guarantee.”

Malinauskas said he was “relieved” to talk about the steelworks’ situation publicly.

“I stand here now, with hand on heart, being able to tell the people of Whyalla what our plan is,” he said.

“For the people in Whyalla, it means they’re in a far better position now than they were this morning.”

Later on Wednesday, Malinauskas will travel to Whyalla. He is expected to have further announcements about the steelworks’ future on Thursday.

Significant issues began at the steelworks last year when its blast furnace broke down twice in six months, leading to major delays and losses for the facility’s owner.

Last week, GFG announced it had reached a commercial agreement with Greensill Capital and said it would sell its Tahmoor Coking Coal mine in NSW to divert money towards Whyalla.

GFG said the agreement remained subject to a final binding legal agreement and marked “the final chapter of GFG’s debt settlement which has been under negotiation since the collapse of Greensill Capital in March 2021”.

The Whyalla Steelworks operations previously fell into administration in 2016 when its former owner, ASX-listed Arrium, collapsed. Arrium was sold to London-based GFG in 2017 in a deal heralded by former premier Jay Weatherill as a “victory for South Australia”.

In September, it was revealed that the state government had requested advice as part of “contingency” planning to be ready if the operator called in administrators.

Wednesday’s development followed weeks of pressure on the steelworks’ operator from local media and the state government.

Revelations that the facility owes tens of millions of dollars to the government and businesses were publicised, while Malinauskas flew to Whyalla to “gather intelligence” from creditors.

State cabinet’s Upper Spencer Gulf subcommittee met in Whyalla on Tuesday. Malinauskas said it was an important opportunity to speak to creditors, the local mayor and council team, unions and the chamber of commerce.

Under questioning in a state parliament committee hearing, SA Treasury chief executive Tammie Pribanic revealed GFG owes SA Water about $15 million in unpaid water bills.

Opposition Leader Vincent Tarzia said it was “absolutely outrageous that SA should be paying for $15 million in unpaid water bills of a billionaire”. He called on Malinauskas to guarantee the bill would not be footed by taxpayers.

This story first appeared in InDaily. Read the original here