Debt-laden steelmaker Arrium should be sold off to the highest bidder, its creditors have been told.
Administrator KordaMentha has released a report arguing "it is more practical to sell the businesses" held by the South Australian group than to wind it up.
This would increase the chances of Arrium continuing as a business and provide a better return to creditors than liquidation, assuming a potential sale price of more than $20 million.
"It is our opinion that it would be in creditors' interests," KordaMentha said in the report dated October 26.
However, KordaMentha also signalled potential issues with Arrium trading while insolvent for a time and entering "voidable" transactions before it went into administration in April with debts of about $4 billion.
"We have identified a number of transactions entered into by the Arrium group of companies that warrant further investigation by a liquidator, if appointed," it said.
"In our view, there is still a significant amount of investigative work to be undertaken in respect to potential recoveries available to a liquidator."
If the sale process is approved at a second meeting of all creditors in Sydney on November 4, KordaMentha's investigations will continue.
Once its findings are concluded, it will report to creditors on whether any of the Arrium companies should be placed into liquidation so claims can be pursued.
KordaMentha is not recommending the appointment of liquidators at this stage.
Arrium's corporate structure is complex and includes 136 entities - 94 of which are in voluntary administration - encompassed by the listed holding company Arrium Ltd.
Its most high profile asset is the Whyalla steelworks in SA.