NRW plunges on warning that SA's Whyalla bill could lead to $113m impairment
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The news: NRW Holdings shares plunged after it warned that a proposed South Australian government bill to nullify a lease agreement relating to Whyalla Port would leave its subsidiary Golding Contractors with a $113.3 million impairment.
The numbers: The construction and mining contractor has warned that if the pill is passed, recovery of Golding’s debt will be seriously impaired and will “raise an impairment provision for the amount of $113.3 million as a non-recurring item in our financial results” for FY25.
NRW Holdings shares returned to trading on Thursday morning after being suspended on Wednesday ahead of the announcement. They fell at the open and were almost 9% lower at $2.64 at 10.25am AEST.
The context: NRW's subsidiary Golding is owed $113.3 million under a mining services agreement with Whyalla Steelworks owner OneSteel, which was put into administration in February.
The SA government’s proposed bill, which was announced on Tuesday, would clarify that the port is owned by GFG Alliance subsidiary OneSteel and effectively nullify a lease agreement signed with sister company Whyalla Port Pty Ltd.
Issues arise because Golding’s first-ranking security interest attaches “to both Whyalla Ports’ assets and its contractual rights, including Whyalla Port’s rights under a lease with OneSteel”.
What they said: “NRW is extremely disappointed and concerned that the proposers and unprecedented intervention by the South Australian government will seriously impair and undermine Golding’s security over Whyalla Ports,” the statement reads.
The source: ASX
