The Coal Trader

Coal Mining Wiggins Island Coal Export Terminal

Wiggins Island Coal Export Terminal in talks on debt refinancing

The Wiggins Island Coal Export Terminal continues to be a topic of conversation in the restructuring community, with funds out of Asia said to be keen to take part in a refinancing.
Expectations are that Queensland-based WICET will need its lenders to extend a refinancing date if it does not want to risk defaulting on its loans. It is believed that about $2.5bn comes up for a refinancing shortly.

Discussions are believed to be taking place between lenders and the coal miners, which own the terminal they use to export the coal, to determine by how long they need to extend the deadline.

Asian funds keen to invest are also believed to be having discussions.

A refinancing would offer banks and lenders an opportunity to exit their WICET exposure if they want out due to concerns around environmental, social and governance matters.

Being a shipper of coal, which produces carbon emissions when burnt, it puts it out of favour. Those not adverse to coal would then have a chance to buy in.

It comes after two large parcels of debt traded in WICET last year worth tens of millions of dollars.

The understanding is that the trading had been in the senior debt stack and was in the range of 80c-90c in the dollar.

Most expect the lenders to extend the loans.

Five years ago, the terminal owed about $US3bn to its senior lenders, which included Australia’s top four banks, and about $1bn to junior lenders, with the holders of the Gladstone Long Term Securities (GiLTS) – effectively mezzanine debt – owed close to $500m.

The face value of the Wiggins Island preference shares (WIPs) was then about $550m.

Helping the shippers that own WICET has been the soaring cost of coal that has made payments to use the terminal viable.

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