Bain leads race to refinance Sanjeev Gupta’s InfraBuild

GFG Alliance chief executive Sanjeev Gupta. Picture: AFP

Bain Capital is believed to be closing in on a refinancing deal for InfraBuild, but it is interesting to note some of the other parties that have been in talks with the Sanjeev Gupta-controlled business.

DataRoom can reveal that private equity Cerberus Capital has been around the hoop, while early on there was talk that Deutsche Bank was looking to pull together a syndicate of lenders to aid the group that sits within Mr Gupta’s GFG Alliance.

However, as earlier first tipped by DataRoom on May 13, Bain is strongly positioned to land the refinancing agreement.

Record Point adviser James Roth is believed to be helping InfraBuild with its refinancing, which is understood to provide additional funds to the group for working capital.

Mr Roth, while at Deutsche Bank, advised on the business when it was part of the then collapsed Arrium and is also working to sell another former Arrium division – Molycop – with Morgan Stanley.

The adviser has been in talks with parties to inject up to $100m of fresh debt into the business, with the process now understood to be well progressed.

InfraBuild has scope to further draw down some debt with its existing lenders, and with the refinancing it can secure up to about $200m collectively.

It is understood that parties, including Oaktree Capital Management, put forward a range of proposals that included refinancing InfraBuild or both that business plus the Whyalla steelworks, also controlled by GFG.

The $2bn steel manufacturer and construction materials provider InfraBuild currently has high-yield bonds worth $US325m ($417m). It also has $US250m worth of loans through a working capital facility with JPMorgan, a small portion of which has been offloaded to Japanese bank Nomura.

Most have suspected that the JPMorgan debt would not be refinanced, given it is not considered to be expensive, only the bonds.

One challenge is that collapsed lender Greensill embarked on a share mortgage deal with Mr Gupta’s GFG Alliance around February over InfraBuild where it ultimately has security over the group’s assets.

Still, InfraBuild is a strong performer amid a period of soaring steel prices. Brookfield has looked at buying the business, but it was not keen to entangle itself with the risks of potential forced asset sales due to the downfall of Greensill.

Centrebridge is also said to have put forward a refinancing proposal.

Mr Gupta has counted Greensill as its major lender and has been working to refinance its operations in Australia, with $US5bn of debt refinancings needed across his global empire.

His business has accounted for about 60 per cent of Greensill’s overall revenue.

Some suggest cross guarantees exist between InfraBuild and Mr Gupta’s Whyalla steelworks.

Whyalla has a proposal on the table for a $420m refinancing through asset-backed financier White Oak Global Advisors and is close to finalising its due diligence.

White Oak was originally a lender to Whyalla, before Greensill stepped in to take its place.

The fund counts former Bank of America banker Ken Pereira as its Sydney-based managing director.

Credit Suisse has sought a winding-up order of Mr Gupta’s $US6bn global metals business Liberty Commodities in a quest to secure funds it is owed by Greensill.