Sandon Capital has is putting more pressure on the Australian steel company, BlueScope Steel. The latest is a push to close Port Kembla steelworks. Sandon, a small fund, but one that acts more as an activist adviser to other funds.
The idea is that the steel company is making some 500 tonnes of steel products at a loss at Port Kembla. That’s a $100 million hit to EBITDA. By simply shutting down or restructuring Port Kembla they could save a lot of money - all that’s lost is a thousand jobs or so.
Sandon calls BlueScope the cheapest steel company in the world. Simply shutting down Port Kembla isn’t the only catalyst though - Sandon has targeted its North Star joint venture, which should be in the hands of a more efficient operator. The fund also thinks that its building solutions business could be divested.
Sandon also put out a presentation yesterday, detailing its plans. Full presentation here.