Sanjeev Gupta’s InfraBuild posts $121m loss amid debt strain and ownership turmoil
The earnings hole underscores the deep financial pressure facing the steelmaker as it fights to stave off collapse. Once the most profitable arm of Mr Gupta’s global GFG Alliance, InfraBuild has come under acute pressure amid falling steel prices.
Sanjeev Gupta’s InfraBuild plunged to a $121.3m annual loss in the 2024 financial year, newly released accounts show, underscoring the deep financial pressures facing the steelmaker as it fights to stave off collapse.
The result comes just weeks after InfraBuild finalised a critical debt restructuring agreement with the majority of its bondholders in a last-ditch move to avoid default and stabilise its operations. However, its underlying performance paints a challenging picture, with revenue down more than 13 per cent and operating profit less than 10 per cent of what was recorded a year earlier.
Once the most profitable arm of Mr Gupta’s global GFG Alliance, InfraBuild has come under acute pressure amid falling steel prices and a broader slowdown in construction activity. The group owns two electric arc furnaces in Sydney and Melbourne, 10 manufacturing mills across the east coast, and a national network of steel distribution and recycling centres.
The $121.3m loss for the financial year ended June 30, 2024 from a $239.6m profit in the previous year, reflects the competing forces confronting InfraBuild as it navigates tight margins, rising costs, and increased regulatory and investor scrutiny.
The situation deteriorated further following the South Australian government’s move to push GFG’s Whyalla steelworks into administration, exposing a complex web of intercompany arrangements. Documents lodged by administrators revealed that InfraBuild had paid hundreds of millions of dollars to other Gupta-linked entities for corporate and shared services.
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.
Mr Gupta maintains that InfraBuild remains fundamentally sound and that the recently concluded refinancing puts it on firmer ground. But credit rating agencies are unconvinced. Fitch Ratings warned last month that InfraBuild is at risk of breaching covenants on its $US150m asset-backed term loan within six months unless earnings improve. A covenant breach could trigger payment acceleration and a potential liquidity crisis.
Fitch, which at the time noted that InfraBuild’s unaudited earnings dropped 43 per cent in the first half of the financial year, warned of further pressure as US steel tariffs risk diverting cheaper steel imports to Australia.
Adding to the instability, not all bondholders appear aligned with Mr Gupta’s restructuring plans. FitzWalter Capital Partners — led by former Macquarie banker Ben Brazil — earlier this year launched legal action seeking an $800 million repayment, claiming a change of control at InfraBuild. While that dispute was settled in April, it eroded confidence in the group’s governance and financial stability.
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Originally published as Sanjeev Gupta’s InfraBuild posts $121m loss amid debt strain and ownership turmoil
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