Soft market forces shelving of Infrabuild float

Sanjeev Gupta has delayed plans to float steel business Infrabuild. Picture: Tait Schmaal

Sanjeev Gupta is understood to have shelved plans to float his Liberty Steel business — recently renamed Infrabuild — for the short term on the back of soft market conditions.

While Infrabuild is said to be performing strongly, comparable companies in the market are lagging, including Adelaide Brighton, which in the past month issued a profit warning and a $100 million writedown due to soft market conditions.

Infrabuild comprises assets from the former Arrium business and would have been the largest float of the year if it was to get underway during 2019. Other floats scheduled to happen by Christmas are also looking doubtful now on the back of soft economic conditions, with Pepper Group already pushing initial public offering plans into 2020 for its Australian business.

The value of Infrabuild was to be in the billions, with Mr Gupta not expected to make a complete exit.

On the agenda for Infrabuild has been improvement projects, given that the business was somewhat neglected in the years it spent in receivership, and potentially further acquisitions which could help bolster earnings before it heads to the market. The mooted listing was to include Arrium’s east coast steel operations and distribution business, including its electric arc furnaces in Melbourne, Sydney and Newcastle.

Mr Gupta purchased Arrium’s operations in 2017 after the steel manufacturer and miner collapsed.

Much of the success of the business rests on the economy, with its long steel products used for infrastructure, buildings and also in the agriculture and mining industries.

Working on the float were Deutsche Bank, Morgan Stanley and JPMorgan.