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Glencore, partners win reprieve on US$3.2B Australian coal port debt

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Glencore, partners win reprieve on US$3.2B Australian coal port debt

A US$3.2 billion debt refinancing plan for the Wiggins Island Coal Export Terminal in Queensland, Australia, received court approval, delaying the start of repayments by the remaining five of its original eight consortium members, Reuters reported Sept. 11.

The maturity of US$2.58 billion of senior debt, which was due Sept. 30, has now been extended until September 2026. The port's 27 million-tonne-per-annum capacity is underused as three of the eight original consortium members are now insolvent, leaving the ones remaining with a heavier debt load, Reuters wrote, adding that this means prices at Wiggins Island Coal are at about US$25/t, roughly five times higher than the adjacent RG Tanna terminal.

The 40% Glencore PLC-owned export terminal also owes A$383 million in junior debt and A$575 million in a shareholder loan, which will mature in 2020 and 2046, respectively.

The refinancing was approved by 90% of the lenders, which comprises a syndicate of about 17 banks, Asian and European lenders, and some hedge funds.

In exchange for the extension, the consortium comprising Glencore, New Hope Corp. Ltd., Yancoal Australia Ltd., Coronado Coal LLC and Baosteel Resources Co. Ltd. unit Aquila Resources Pty. Ltd. will make repayments at a higher rate.