Lenders to the Wiggins Island Coal Export Terminal in Queensland, Australia, agreed to extend about US$3 billion due on an outstanding loan for eight years, giving the debt-laden terminal operator a lifeline, Reuters reported March 22, citing two unnamed sources.
The extension had been agreed but not yet signed by the parties. Once signed, the proposed deal would see all free cash flow from the terminal used to pay down the loan.
The partners will now have to pay debt and loading charges of about US$25/tonne of coal, which is five times higher than port fees at the nearby RG Tanna coal terminal.
The terminal's lenders are looking to reduce debt to below US$1.5 billion to make it easier for the project get a credit rating that will help it refinance some of the loan from the bond market.
The terminal is owned by Glencore PLC and its partners, including New Hope Corp. Ltd., China's Yancoal Australia Ltd. and Aquila Resources Inc.
The partners have until September to either refinance the loan or pay off the full amount over the next 15 years.
According to a September 2017 report, Glencore tabled a loan restructuring proposal that suggested lenders take a haircut of up to 30 cents on the dollar on their US$2.8 billion exposure in exchange for Glencore's continued support as the biggest port user.