KPMG cautions on uncertainty at Gupta’s InfraBuild ahead of bond offer

afr.com:

KPMG, the auditor of British industrialist Sanjeev Gupta’s InfraBuild, has warned of “material uncertainty” for the Australian steel distribution group if it is unable to complete a $US350 million ($544 million) financing offer to replace debts that fall due late next year.

Jefferies is handling the $US350 million senior secured notes issue which InfraBuild, the former OneSteel and Smorgon Steel business, is embarking on to pay for $325 million in bonds that are set to mature late next year.

Sanjeev Gupta’s GFG Alliance has been under significant financial pressure since the 2021 collapse of its main financier, Greensill Capital. Glenn Campbell

KPMG partner Kristen Peterson, in signing off InfraBuild’s latest financial accounts on October 27, pointed to a note in the accounts that outlined the uncertainty, and the importance of the offer for the company. The Australian Financial Review reported on Friday that InfraBuild had warned it was unsure whether it could find interest for the new issue.

InfraBuild on Monday said the business was performing strongly. “Our financial results show that our performance remains very strong, and we continue to have strong working capital outcomes and our financing arrangement supports the continued liquidity of the business,” a spokeswoman said.

InfraBuild’s net profit after tax for the 12 months to June 30 was down 16 per cent to $240 million, the latest accounts show.

Mr Gupta’s broader GFG Alliance empire spans steel mills in Europe, North America, the Whyalla steelworks in South Australia, and InfraBuild.

GFG, which has a global workforce of 35,000, has been under significant financial pressure since the collapse in 2021 of Mr Gupta’s main financier, Australian banker Lex