Sanjeev Gupta says Aussie steel jobs safe

In his first major interview since the spectacular Greensill collapse, Sanjeev Gupta is in a battle for survival.

GFG Alliance executive chairman Sanjeev Gupta.

Sanjeev Gupta is on the ropes but the owner of the Whyalla steelworks and steel manufacturer ­Infrabuild insists their 6500 Australian jobs are secure.

“I’m committed to all steel plants, especially to Australia, especially to Whyalla,” Mr Gupta said in his first Australian ­interview since the collapse of his major ­financier Greensill Capital last month. “There is nothing that will happen to this business under my watch.”

The British industrialist’s pioneering global vision for green steel is now reduced to a battle for survival of his many businesses employing more than 30,000 people worldwide following the Greensill collapse.

Mr Gupta spoke to The Weekend Australian from Dubai, the morning after a critical meeting to negotiate a standstill agreement with Greensill’s administrator Grant Thornton, to allow him time to try to refinance his steel business.

“It was a positive meeting and discussions are progressing so I’m very hopeful that it will result in a standstill” Mr Gupta said.

If agreement is not reached with the administrator, Mr Gupta said his company GFG Alliance had a robust legal defence that had been stood up and was ready with a back-up plan. However Mr Gupta insisted that a court battle was in no one’s interest. “Obviously there is tens of thousands of jobs at stake but also, from their own creditors’ perspective, from their own recovery perspective, it’s not in their interest to damage the business,” he said. “We made it very clear that they would be destroying their own value.”

The Australian business is the gem in the Gupta empire. “Infrabuild has had its best half-year ever,” Mr Gupta said. “Whyalla, for the first time probably forever has turned from the red to the black and it is forecasting to make a return next year. We bought the business, especially on the ­Whyalla side when nobody believed in it.”

In mid-March ratings agency Fitch placed Infrabuild’s credit rating under negative review.

“The concern of the rating companies was what was happening to the rest of the group and whether that could have an impact on Infrabuild, but its own business is well isolated,” Mr Gupta said. “It has its own board and covenants and it keeps its stock, subject to any contamination from the rest of the group.

“Infrabuild from its own perspective should have had a notch up, not a notch down because its performance and cash flow have improved significantly since its last rating”.

Mr Gupta acknowledged there was a lot of concern within Infrabuild and its suppliers. “In reality this is one group one family,” he said. “They do impact each other, but the important thing to remember is that business is doing well in terms of the future and no matter what happens it will continue to be a success.”

Mr Gupta said the Australian business had been moving away from Greensill funding, citing ­Infrabuild’s listed bond borrowing. “Whyalla was also in that journey but then we got hit by COVID,” he said. “Had we not been hit by COVID, Whyalla would also by now have had refinancing.”

Asked if he believed he would need to break off Australia as part of a solution, Mr Gupta said, “No. This is the family. It is a business which has strong parts, but all our steel businesses have a great future. This model has proven itself. We have saved thousands of jobs, it is showing economic results and it is also working well from an environmental point of view.”