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SA Threatens Legal Action Over Missed Nyrstar Payment

Port Pirie Smelter.jpgThe South Australian Government has threatened legal action after Belgian metals processor Nyrstar said it would defer repayments on a loan to upgrade the Port Pirie smelter.

The company has begun a two-year redevelopment of the new $660 million multi-metals facility using a loan a loan underwritten by the former Labour government. 

The upgrade was planned primarily to improve lead emission levels and expand the processing capabilities of the site.

Nyrstar says it has not breached any agreements by deferring the initial $37 million repayment.

South Australian Treasurer Rob Lucas says the company had indicated it planned to defer payments to its international financiers until November 2019, pushing back the first 18 months of a five-year schedule of repayments. 

The Government underwrote a guarantee for the $291.25 million in external finance raised by the company, which now sits as a liability on the state's balance sheet.
If the company defers additional repayments until November 2019, that is around $118 million will likely compound the exposure of taxpayers to the guarantee issued by the former government.

He described the contract that did not require the company to make loan repayments at set intervals as "unusual".
Mr Lucas says he will defend the states position and its right to take the steps that may be necessary to ensure Nyrstar meets its contractual obligations.

 

Image Source: ABC News: Glen Moret