BlueScope Applies for $100m Advance in Steel Transformation Plan

Submitted by Share Market Writer on 12 December, 2011 - 13:31

Steel making giant BlueScope Steel (BSL) has applied for $100 million assistance from the Federal Government's Steel Transformation Plan (STP) after shares dropped down to 42.5 cents last Friday. The steel maker said it applied for money from the government's STP, which became available last Friday.

“We believe the Federal Government’s Steel Transformation Plan, is tangible evidence of the importance the government places on having a viable, competitive and innovative domestic steel industry in this country," said BlueScope Steel Managing Director and CEO Paul O'Malley. “The STP advance, together with the company’s capital raising, potential asset realisation opportunities, and the restructuring of our Australian operations which is now well advanced, will all help accelerate our return to profitability and growth."

The STP allows the steel maker to access $100 million of the $180 million allocated in its plan. Adding this to the $600 million equity-raising and some asset sales will be enough to strengthen the company's balance sheet.

O'Malley is confident that BlueScope Steel will meet the eligibility criteria of the Federal Government and will secure its approval for the advance.

BlueScope Steel raised A$338 million last month to increase finances despite the rising costs and weakening sales.

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