Despite the trading performance, InfraBuild has been subject to repeated downgrades by ratings house Moody’s. The most recent, in December, saw Moody’s cut InfraBuild’s ratings to Caa1.
A Caa rating is “judged to be of poor standing and are subject to very high credit risk” according to Moody’s website.
InfraBuild owns the steelmaking and distribution business formerly owner by Arrium and predecessor OneSteel. Louie Douvis
“Moody’s views InfraBuild not completing its refinancing initiatives at least one year prior to maturity, combined with the ongoing delays relative to our previous expectations, as exposing the company to material refinancing risk,” Moody’s said in its downgrade notice.
“If the refinancing is not completed ahead of maturity, Moody’s expects this would significantly reduce the company’s liquidity buffer and flexibility to deal with any material downside to our current forecasts.”
InfraBuild is ultimately owned by Gupta’s GFG Alliance, which is based in the UK and has investments in industrial, energy and natural resources companies globally.
Big business
Liberty InfraBuild Ltd, the consolidated holding company for the Australian business, had $514.8 million in interest-bearing liabilities at June 30 last year.
The liabilities included the redrawable ABL facility, used for cash flow needs and letters of credit, with a $250 million face value, and senior notes worth $US325 million ($440.5 million) and due to mature in October 2024.
InfraBuild has been in on and off talks with credit funds and other potential financiers in recent years, as part of its overall capital management program. It had advisory firm Record Point leading talks with credit funds and other potential backers last year, with talks centred on the ABL facility that is provided by firms including JPMorgan and Nomura.
Bain Capital Credit’s a deep pocketed investor globally and an active participant in Australian deals. It has about $US50 billion invested globally and its local holdings include stakes in Virgin Australia and vehicle financier Allied Credit.
