Gupta to try again on Infrabuild steel float

Billionaire Sanjeev Gupta has vowed to revive a $1bn float of local steel manufacturing unit Infrabuild by late 2020.

Billionaire Sanjeev Gupta. Picture: AFP

Billionaire Sanjeev Gupta has vowed to revive a $1bn Australian sharemarket float of local steel manufacturing unit Infrabuild by late 2020 after committing $US150m ($220m) of his own cash to top up a disappointing debt raising.

The British industrialist — who rescued South Australia’s Whyalla steelworks from administration — will inject the equity into Infrabuild after a plan to raise $US475m to refinance short-term loans was scaled back to a debut $US325m bond at a high coupon of 12 per cent.

An additional $250m loan with JPMorgan is also expected to be unlocked, based on a successful bond raising.

The new bonds were rated Ba3 and BB by Moody’s and Fitch, reflecting the relative risk of the business two years after it was bought out of administration.

Mr Gupta had originally hoped to conduct a local initial public offering this year for his ‘‘green steel’’ business, which has plants in Melbourne, Sydney and Newcastle. It supplies 15,000 customers in Australia and includes electric arc furnaces acquired when his GFG Alliance bought the Arrium business out of receivership in 2017 for $700m.

The commodities operator told The Weekend Australian he now favoured waiting on the float for another 12 months in order to ensure the business had another year of performance behind it and a solid track record.

“It is actually IPO-ready now but the only thing, in terms of timing, I think another year of operations would be good. It’s made more and more money as we’ve gone along but there is still work to do and getting another year of performance behind us so we are three years rather than two out of bankruptcy would help with the process.”

The reaction to the bond from investors was below expectations, Mr Gupta said.

“The bond itself was a bit disappointing and I thought it would do better. I put in some equity obviously and we have a very competitive asset-backed loan from JPMorgan.”

Mr Gupta said the deal would allow it to pay back a short-term $545m loan from financier Greensill Capital and $200m from US lender White Oak.

The businessman shot to prominence after rescuing Arrium’s financially troubled Whyalla steelworks in South Australia along with the purchase of a NSW coking coal mine from Glencore and the promise of $1bn of investments in solar, wind, battery and pumped-hydro generation to support the now profitable steel business.

Mr Gupta has also vowed to improve transparency in parts of his international empire.