Infrabuild float gains buoyancy on CEO rumours

Talk is growing around a float of Sanjeev Gupta’s Infrabuild business in the second or third quarter of the year.

Cleanaway chief executive Vik Bansal Source: Waste Management Review

Talk is growing around a float of Sanjeev Gupta’s Infrabuild business in the second or third quarter of the year.

The biggest signal to the market that it might be a goer is the expectation that the man who would run the newly listed steelmaking business is Cleanaway boss Vik Bansal.

Speaking to The Weekend Australian about his GFG Alliance, Mr Gupta was tight-lipped on both these matters.

“We’re always looking at capital markets transactions,” he said. “I can’t say more than that. We are always looking, consulting, and Infrabuild is a great business and could well suit capital markets and we will see. Time will tell.”

Infrabuild is the country’s largest manufacturer and supplier of steel long products, with two electric arc furnaces and a recycling business. Mr Gupta was forced to abandon plans for a partial float last June, amid volatile markets and with a global cost-cutting exercise under way due to the pandemic.

But 2021 presents a very different picture, with a comeback in the steel market and the sharemarket enthused by the economy’s recovery.

The excitement in the float is the mooted CEO, Mr Bansal. A sign of how the market rates his value is the 10 per cent slump in the Cleanaway share price on the day he said he was leaving.

The controversy over his “overly-assertive” management style, as described by the company, was jumped on by some in the media, but investors are far more likely to be swayed by the impressive job he has done there, as outlined by my colleague John Durie.

Secondly, Mr Bansal worked at Infrabuild when it was OneSteel from 2007 to 2010, where he led the steel distribution and metal processing division.

Thirdly, he drove a strong sustainability transformation agenda at Cleanaway, which aligns well with Mr Gupta’s “green steel” strategy to manufacture carbon-neutral steel. And Mr Gupta is keen to beat that drum.

“There is recognition in the US for electric arc furnace green steel producers, but globally there is less,” he said.

“I think we will get more. Companies that are doing that, like Infrabuild, will get better and better valuations and support from capital markets.”

Infrabuild’s $700m debt raising in 2019 had to be downsized, with Mr Gupta injecting $150m of his money.

Mr Bansal’s announcement that he was leaving Cleanaway seems to have caught the board by surprise, and it is understood he is not in a position to make public his next role.