SYDNEY, April 19 (Reuters) - The administrator for Australia's Arrium Ltd said it was in talks with lenders for about A$200 million ($155.60 million) in funds to ensure the troubled steel and mining group, which already owes its creditors A$4 billion, can operate normally.
Administrator KordaMentha Pty said Arrium holds a strong cash position but that it was looking to secure funds for ongoing requirements.
"So far, we have been able to manage cash flows within the requirements, but there may come a point where we need to manage trading in respect to some critical supplies, or to manage capex requirements," administrator Mark Mentha told reporters following a meeting with creditors in Sydney.
Arrium went into voluntary administration earlier this month after its creditors, including Australia's big four banks, in February rejected a $927-million bailout proposal by private equity group GSO Capital Partners that would have required them to accept no more than 55 cents in the dollar on their claims.
Arrium's financial descent into administration, a potential prelude to bankruptcy, underscores the uphill battle facing smaller firms with high debt versus larger and more efficient sector giants. It also shows how creditors are souring on indebted resource companies in the current tough climate.
"We have had negotiations with the banks to provide credit facilities. We are looking to have a facility of around a couple of hundred million dollars," Mentha said.
Arrium currently owes around A$4 billion ($3.11 billion), including A$2.8 billion due to Australian and overseas banks. The balance includes dues to nearly 8,000 employees, U.S. bond holders and trade creditors. = 1.2853 Australian dollars)