WICET SAGA: Court tosses coal terminal a lifeline
THE owners of Wiggins Island Coal Export Terminal have received an eight-year respite on debt repayments, which some feared would lead to the facility's demise.
A New South Wales Court has given the go-ahead to a $3.5billion refinancing plan, hoped to help the miner owners handle its senior debt.
The deal comes ahead of the September 30 deadline when Glencore, Aquila Resources, New Hope Group, Coronado Curragh and Yancoal had to begin repayments or refinance the debt.
The group will now have the maturity of $3.5billion in senior debt extended until September, 2026.
Allens partner Nick Adkins, who has been involved in the legal representation of the 23 senior lenders since 2010, said the result showed there was support for the future of WICET's operations.
"It's likely WICET would have gone into receivership (without the plan) ... that's not an outcome that was in anyone's best interest," he said.
The plan was supported by all but one senior lender.
The scheme also delays the deadline of repayments to junior debt, worth $383million, due by September 30, 2020, until after the senior debt has been dealt with.
An independent report referenced during the court proceedings shed light on the concerns held for the facility if it did not refinance its senior debt.
The report, by Deliotte's Janna Robertson, said without the finance scheme WICET's directors would likely appoint voluntary administrators and the financiers would appoint a receiver.
She said the scheme would give WICET enough income to meet all operating and finance cost when due.
During the proceedings, Justice Ashley Black said the terminal was operating at a "cost recovery" basis, rather than for profit.
While it can handle 27 million tonnes of coal per year, the terminal only exports 60 per cent of this, partly due to the collapse of three of the eight original owners - Caledon Coal, Bandanna Energy and Cockatoo Coal.
WICET's counsel Michael Izzo and James Lockhart said the scheme avoided the risks of WICET insolvency.
WICET, Glencore and WICET's counsel declined to comment on the result.