Sanjeev Gupta’s InfraBuild wins debt reprieve and shakes up board

Sanjeev Gupta has won some breathing room for his steel products company after agreeing a new $US150m debt finance deal with bondholders and shaking up the board.

Sanjeev Gupta’s steel products company InfraBuild has finalised a new debt finance deal.

Sanjeev Gupta’s InfraBuild has agreed a final debt restructuring deal with a majority of its bondholders and delivered a board shake-up as the steel manufacturer scrambles to free up funds to avoid a corporate default.

The embattled steel products company finalised a new $US150m debt finance deal, easing immediate pressure, with some $700m of free cash now on the balance sheet taking into account $US550m of existing bond agreements.

The pact also officially pushes back the due date for the company’s 2024 financial accounts to May 31, the third time the date for the filing of the books has been delayed.

Finalising the bondholder deal hands InfraBuild a “robust cash position allowing us to operate efficiently through these current tough market conditions,” the company’s chief executive Francisco Irazusta said.

The ability of InfraBuild to file its financial reports was disrupted by the South Australian government pushing Mr Gupta’s GFG Alliance-owned Whyalla steelworks into administration.

GFG has also faced strains over $US5bn owed to its former financier Greensill.

The bond deal has also been timed with a shake-up of InfraBuild’s board just months after one of Mr Gupta’s trusted lieutenants, Dak Patel, quit as a director.

Sanjeev Gupta’s Whyalla steelworks in South Australia was seized by the South Australian government amid overdue debts. Picture: Dean Martin

GFG Alliance’s chief investment officer, Sandip Biswas, has retired from the board along with Monica Middleton, who previously worked at Dutch international ESG investor, Oikocredit.

David Barse from index firm XOUT Capital will join the board along with GFG Group general counsel Simon Nasta, appointed as executive director following due process.

“I’m pleased InfraBuild will benefit from the calibre of experience brought by David Barse with his knowledge of US capital markets and Simon Nasta who will strengthen the company’s legal rigour, controls and enhance systems, supporting the overall governance of InfraBuild,” Mr Gupta, GFG’s chairman, said.

Fitch warned this month that InfraBuild was at risk of breaching the covenants around the $US150m asset-backed term loan (ABTL) within the next six months unless earnings recovered. Breaching those covenants could in turn lead to “payment acceleration and a liquidity crunch’’.

Fitch said that based on unaudited financial statements, InfraBuild’s EBITDA fell 43 per cent in the first half of FY25. Earnings would come under further pressure as US steel tariffs potentially diverted steel imports into Australia, the firm said.

In early March a meeting of the creditors of OneSteel Manufacturing, which owns the Whyalla steelworks and associated iron ore mines, heard that the company owed $1.3bn to creditors, including more than $500m being claimed by InfraBuild.

Not all InfraBuild bondholders appear on side with Mr Gupta’s blueprint to haul the company back on track through a series of financing deals.

GFG chairman Sanjeev Gupta. Picture: AFP

InfraBuild in March attacked the Ben Brazil-led private equity firm FitzWalter over its ­demand for an immediate $800m repayment from GFG Alliance, describing its lawsuit as “spurious” and calling for the case to be ­dismissed.

FitzWalter purchased bonds in InfraBuild Australia, owned by Mr Gupta and the country’s largest processor and distributor of long-steel products, but took legal action claiming there had been a fundamental change of control in the company.

The investment firm argued that control had passed from Mr Gupta to creditors owed money from GFG after the collapse of Greensill, a major lender to the former tycoon.

InfraBuild said FitzWalter’s case was “literally backwards”, noting the private equity firm bought their interest in the bonds more than a year after the November 2023 indenture and just two months before bringing the lawsuit.

The SA government pushed OneSteel Manufacturing into administration in mid February, with documents later revealing the government’s Department for Energy and Mining was owed $34.1m by the company and water utility SA Water another $15.02m.

OneSteel Manufacturing’s debts were assessed by administrator KordaMentha at $1.34bn, with other companies in Mr Gupta’s GFG group, including long steel products maker InfraBuild, claiming to be owed $536m.

An affidavit lodged by KordaMentha says the firm will be examining the “lawfulness” of some of the transactions behind those claimed debts.

KordaMentha has also lodged a legal bid to seize control of Whyalla Ports – the port operator adjacent to the steelworks – back from Sanjeev Gupta’s GFG Alliance, arguing a “purported lease” over the facility should be struck out.