Hundreds of millions flow from InfraBuild to Gupta steel empire

afr.com:

Sanjeev Gupta’s InfraBuild is paying hundreds of millions of dollars in fees to the British industrialist’s other companies as payment for “shared services”, just one part of a complex series of transactions between the Australian company and the businessman’s broader, ailing steel empire.

In extensive disclosures made to potential bondholders, InfraBuild details that it has also paid more than $1.1 billion to Mr Gupta’s Whyalla steelworks for billet – metal bars which are processed into other products – in the last three years under an agreement that allows payment before any delivery.

Sanjeev Gupta’s companies are highly dependent on each other. 

InfraBuild has also paid Mr Gupta’s Whyalla steelworks $579 million in the last three years for hot-rolled structural steel, the disclosures show.

InfraBuild, the former OneSteel and Smorgon Steel business, was acquired by Mr Gupta when he purchased the assets of the collapsed former BHP subsidiary Arrium in 2017. It is one of the most profitable parts of the businessman’s GFG Alliance empire, which spans steelmaking operations in Europe and North America and employs around 35,000 people.

While InfraBuild reported a profit of $239.6 million for the 12 months to the end of June, GFG Alliance has been buffeted by deteriorating finances and is being chased by creditors for some $5 billion. Mr Gupta’s main lender, Australian financier Lex Greensill’s eponymous bank, collapsed in 2021.

The related company transactions are disclosed in documents circulated to potential bondholders last week when InfraBuild sought $US350 million ($550 million) in debt to cover the repayment of $US325 million next year.

They show a shared services agreement with Mr Gupta’s other companies – for