Finance minister Grant Robertson. Photo / Hagen Hopkins
Finance minister Grant Robertson. Photo / Hagen Hopkins
The Government is in talks with NZ Steel and Refining NZ to try to prevent potential closures and jobs losses but would prefer the businesses got help from their banks than taking an equity stake in them.
BlueScope, which owns NZ Steel and Pacific Steel, yesterday told the ASX thata strategic review of its NZ and Pacific Islands segment was well underway and was proposing to reconfigure the business.
"The proposed reconfiguration could see a substantial number of roles being made redundant."
It also warned that steel-making at its Glenbrook mill in Auckland may cease.
"While we are confident we can deliver on this plan, in the event that the improvements are not achieved, the business may shift to external supply of products, and primary steel making operations at Glenbrook may cease."
BlueScope took a $197 million write-down on the NZ and Pacific Island segment, which dropped its net profit after tax to A$96.5m.
Meanwhile, Refining New Zealand is also reviewing its operations.
Yesterday the company revealed a $186.4m loss in the half year to June 30.
Refining New Zealand is still undergoing a review of its business. Photo / file
Refining NZ started its strategic review in April and said it was now developing plans to simplify refinery operations and structurally reduce operating costs, making the business robust to an extended period of low-margins.
Yesterday chief executive Naomi James said it continued to work closely with customers to assess the longer-term options and with Government and other stakeholders to ensure there was a planned and coordinated approach to future changes.
A further update on the review is expected to be made around the end of the third quarter.
This morning Finance Minister Grant Robertson told Mike Hosking on NewstalkZB that he didn't accept accusations that Government regulations and the Emissions Trading Scheme was driving big industrial businesses out of New Zealand
"I don't accept that at all."
Robertson said it continued to work with Rio Tinto over the closure of the Tiwai aluminium smelter in Bluff and was also in talks with NZ Steel and Refining NZ.
"They are an important parts of NZ's industrial make-up so we will be working with them to help support those jobs."
He said the Government had established an economically significant business unit in April to work alongside businesses like those named to see if there was anything the government could do to help them manage. "But bear in mind these are globally interested companies, they understand what is happening in the rest of the world. So we have to work alongside them to retain those sorts of jobs in NZ. That is a conversation we are happy to have with them but obviously they have to fight their way through a very challenging global environment. "
Robertson said taking an equity stake in businesses was one of the options the unit could take but it was unlikely.
"We established that unit so could put on the table a range of options. Clearly the first preference is for organisations to work with their banks or the debt facilities they already have.
"The Crown getting a stake in a large number of industries in not necessarily the way a mixed economy would work. These are unusual times we have got to look at where we are at. There are a range of options that would be available."
