Federal Court of Australia

Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) (No 3) [2026] FCA 1432

ORDERS

THE COURT ORDERS THAT:

Extension of convening period

1.    Pursuant to section 447A(1) of the Corporations Act 2001 (Cth) (Act), the period within which the first plaintiffs must convene the second meeting of creditors of the second plaintiff under s 439A of the Act is further extended to 31 March 2027.

2.    Pursuant to section 447A(1) of the Act, Part 5.3A is to operate in relation to the second plaintiff such that the second meeting may be convened at any time before, or within, five business days after the end of the convening period as extended by order 1 above, provided that the first plaintiffs give notice of the meeting to creditors of the second plaintiff, including the persons claiming to be creditors of the second plaintiff, at least five business days before the meeting.

Other matters

3.    The first plaintiffs’ costs of the application be paid as costs of the administration of the second plaintiff.

4.    There shall be liberty to any creditor, or other person with a sufficient interest in these orders, to apply to vary these orders on reasonable (and in any case not less than seven days’) notice to the first plaintiffs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

NESKOVCIN J:

1    In early 2025, OneSteel Manufacturing Pty Ltd (Administrators Appointed) was one of the largest producers of structural steel and the only domestic producer of steel long products in Australia, based in the regional town of Whyalla, South Australia. The first plaintiffs were appointed as the voluntary administrators (Administrators) of OneSteel by the Government of South Australia on 19 February 2025. Since their appointment, the Administrators have undertaken a process of stabilising the operations of OneSteel to prepare it for a sale or restructure, with funding support from the South Australian and Commonwealth Governments.

2    Ordinarily, the convening period for a second meeting of creditors is the period of 20 business days beginning on the day after the administration begins, in accordance with s 439A(5) of the Corporations Act 2001 (Cth), although short extensions of time are commonplace. Further extensions of time are less common, but not unheard of: see, eg, Beattie, in the matter of National Projects QLD Pty Ltd (No 3) (Administrators Appointed) [2025] FCA 104 (Shariff J); Knight, in the matter of ANZ Hospitals Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 2) [2026] FCA 589 (Jackman J).

3    The Court has extended the convening period in the OneSteel administration on two previous occasions: Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) (2025) 174 ACSR 61; [2025] FCA 219 (OneSteel (No 1)) and Hams (Administrator), in the matter of Onesteel Manufacturing Pty Ltd (Administrators Appointed) (No 2) [2025] FCA 1651 (OneSteel (No 2)). The first extension was granted on 18 March 2025, extending the convening period by 12 months. Towards the end of that 12-month period, a further six-month extension was granted, extending the convening period until 30 September 2026. This is the third occasion on which the Administrators have approached the Court to extend the convening period. On this occasion, they sought an additional six months.

4    The application was made by originating process dated 14 September 2026, just over two weeks before the convening period was due to expire. The application was listed for an urgent hearing on 21 September 2026.

5    The application and affidavit in support were served on the Australian Securities and Investments Commission and the Committee of Inspection. At the hearing, the Court was told that the Administrators had not been notified of any objections to the application. No party appeared to oppose the application.

6    At the hearing, I made orders extending the convening period for a further six months to allow a proposed transaction for the sale and transformation of OneSteel’s business to progress. These are my reasons for doing so.

Why a further extension of the convening period was sought

7    The background to the OneSteel operations and the steps taken by the Administrators to stabilise OneSteel’s business and progress a sale or restructure of the business are set out in OneSteel (No 1) at [6] – [18] and OneSteel (No 2) at [6] – [20].

8    Two matters are worth emphasising. First, the scope and significance of the OneSteel operations, particularly to the town of Whyalla and the broader community. Secondly, the South Australian and Commonwealth Governments have committed significant public resources to secure the long-term future of the steelworks in Whyalla.

9    The Administrators have confronted several challenges which have meant the administration has progressed more slowly than anticipated. In her affidavit sworn on 14 September 2026, Ms Lara Wiggins, one of the Administrators, emphasised the following challenges as being material to this application. First, an unplanned shutdown of the blast furnace, leading to no usable iron being produced since April 2026, and the recent decision to close the blast furnace. While this must have been devastating for hundreds of employees, it also required the Administrators to prepare and provide bidders with updated financial forecasts reflecting the changing operational position and its financial consequences. Secondly, issues with the intermingling of the operations and administrative functions, and shared technological infrastructure across the group of companies to which OneSteel belongs, have complicated the due diligence process. Thirdly, according to Ms Wiggins’ evidence, finalisation of the sale and restructure process is contingent upon finalising the terms of funding support with the State and Commonwealth Governments, and the negotiation of those matters are ongoing.

10    Despite being told on the last occasion that the Administrators had made substantial progress and that the sale and restructure process in respect of OneSteel’s business was well-advanced, more time is required to finalise the negotiations and transaction documents.

11    The Administrators initially selected five shortlisted parties to engage with the South Australian and Commonwealth Governments to submit an overarching business transition plan for the steelworks in Whyalla and negotiate a proposed funding support term sheet. The Court was told that the successful implementation of the proposed sale transaction will depend upon the bidder securing funding support from the South Australian and Commonwealth Governments.

12    The Administrators and the South Australian and Commonwealth Governments have progressed to the final stage of the sale and restructure process with two shortlisted parties, Jindal Steel and M Resources. The transaction structure currently being pursued by the remaining two bidders is a sale effectuated via a Deed of Company Arrangement, conditional upon funding support from the State and Commonwealth Governments to be tied to the implementation of their respective proposed transformation plans for OneSteel’s business.

13    The evidence before the Court indicated that the South Australian and Commonwealth Governments require more time to negotiate with the remaining bidders to finalise the arrangements that will support the proposed transformation plans and transaction structures. Once the negotiations are substantially advanced, the South Australian and Commonwealth Governments are expected to endorse a particular bidder, or both bidders, depending on the proposed transaction structure.

14    There is one further issue, which is that BlueScope Steel (AIS) Pty Ltd has a right of last offer (ROLO). This effectively means that BlueScope has 10 business days from receipt of the proposed transaction information from the bidder or bidders to submit a counteroffer.

15    These circumstances mean that the Administrators will not be in a position to effectively determine which proposal to recommend to creditors or finalise their report to creditors until they have the proposed transaction information from the two remaining bidders, and the ROLO process has concluded.

Principles in relation to extensions of convening periods

16    The principles that apply to the Court’s power to make orders under s 447A(1) of the Act to extend, on a subsequent occasion, the convening period for the second meeting of creditors are set out in OneSteel (No 1) at [24] – [30] and OneSteel (No 2) at [21] – [30].

17    It is well established that the power under s 447A(1) to make such orders as the Court thinks appropriate about how Pt 5.3A is to operate in relation to a particular company permits the Court to grant multiple extensions of the convening period: Mableson (Administrator), in the matter of Bibere Australian Beverages Pty Ltd t/as Fox Creek Wines (Administrators Appointed) [2025] FCA 533 at [38] (Jackson J). However, the power to extend the convening period is one that should not be exercised as of course: Crawford, in the matter of North Queensland Heavy Haulage Services Pty Ltd (Administrators Appointed) [2017] FCA 635 at [19] (Markovic J) and Albarran, in the matter of Chala Metals Limited [2025] FCA 984 at [1] and [4] (Owens J).

18    The exercise of the discretion under s 447A(1) is to be approached on the same basis as it is under s 439A(6): Mableson at [38] (Jackson J); Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 at [14] (Middleton J). The Court’s task is to reach an appropriate balance between an expectation that the administration will be relatively speedy and summary and the countervailing factor that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising a return for creditors and any return for shareholders: Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 at [10] (Barrett J).

19    Relevant considerations in the circumstances of the present application include:

(a)    the size and scope of the business, the complexities of the corporate structure, the complexities and issues in the administration, and the time needed for a thorough assessment of the business and sale of the business as a going concern: Re Riviera Group Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (2009) 72 ACSR 352; [2009] NSWSC 585 at [13] (Austin J); Mighty River International Limited v Hughes; Mighty River International Limited v Mineral Resources Limited (2018) 265 CLR 480; [2018] HCA 38 at [73] (Nettle and Gordon JJ, in dissent, but not relevantly in this respect);

(b)    whether the extension will enable the administrators to prepare and provide the report and statements and to arrive at the opinion required by s 439A(4), in order to inform creditors adequately so that they will be in a position to decide whether to terminate the administration, execute a deed of company arrangement or place the company in liquidation: Re Pan Pharmaceuticals Ltd (admins apptd) (ACN 091 032 914) (McGrath and Honey as joint liquidators) (2003) 46 ACSR 77; [2003] FCA 598 at [41] (Lindgren J).

Why the further extension of the convening period should be granted

20    I was satisfied that the convening period should be further extended to 31 March 2027 for the following reasons.

21    First, according to the Administrators, the transaction pathway that the Administrators are pursuing represents the best opportunity presently available for the eventual continuation of the Whyalla steelworks and the ongoing operation of OneSteel’s adjacent businesses. Furthermore, the continuation of the steelworks through the proposed sale transaction is capable of delivering significant employment opportunities for the community of Whyalla, and the broader regional economy, and delivering sustainable, long-term value for OneSteel’s stakeholders (although the Administrators are not expecting any material return to ordinary unsecured creditors as a result of the sale process).

22    Second, the successful implementation of a proposed sale of the OneSteel business depends upon the bidders securing funding support from the South Australian and Commonwealth Governments. The Court was told that the South Australian and Commonwealth Governments remain committed to the proposed sale and transformation strategy for OneSteel’s business, however, they require time to conclude their negotiations with the remaining bidders.

23    Third, a six-month extension of the convening period is commensurate with the time that the Court was told is required for the South Australian and Commonwealth Governments to finalise the negotiations with the potential bidders, and for the preparation of the transaction documentation.

24    Finally, there are several issues of public importance at stake. There is a clear utility in extending the convening period to allow the negotiations in relation to the proposed transformation plans and funding support for OneSteel’s business to continue. There was no evidence of prejudice or opposition to the extension. The extension will provide the Administrators with time to be able to provide a more meaningful report to OneSteel creditors and make an informed recommendation as to OneSteel’s future. The orders sought also allow the second meeting of creditors to be called at an earlier time, if that turns out to be possible. This type of order is known as a “Daisytek order”: OneSteel (No 1) at [2]. I am satisfied that this order is appropriate and consistent with the object of Part 5.3A, as expressed in s 435A of the Act.

25    For those reasons, I made orders in the terms sought by the Administrators and directed the Administrators to provide a copy of these reasons to the Committee of Inspection.

Associate:

Dated:    29 September 2026