Legal action report 'deeply concerning': Senator

Legal action report 'deeply concerning': Senator

Reports of legal action against Australian businesses owned by British billionaire Sanjeev Gupta have been described as "deeply concerning" by a South Australian Senator.

Senator Rex Patrick, who has been questioning federal government representatives about contingency plans should GFG Alliance fail, said he had urged the government to prepare for this scenario.

"There are just so many things that are outside Mr Gupta's control in all of this," he said.

Senator Patrick called on Prime Minister Scott Morrison to reassure the people of Whyalla by ensuring the town's steelworks survived.

"I am not asking the government to intervene at this stage, I am just asking him to stand with the people of Whyalla," he said.

Whyalla Mayor Clare McLaughlin said GFG Alliance had reassured her they would meet any legal challenge head on.

"We've been reassured by GFG Alliance that they will vigorously defend any legal proceedings; that they continue to have sufficient funds for their current operations - which are performing very strongly - and that they are progressing well in securing alternative funding," she said.

"These are all encouraging signs, so we implore the community to remain positive as this process plays out, and to not jump to conclusions based on speculation.

"Council was recently briefed by GFG on their local operations, and it was extremely encouraging to hear about their profitability; the record rates of production; strong demand for their product; as well as the positive attitude of their employees despite recent external speculation.

"This is all very positive news that should give the community confidence in GFG's future in Whyalla."