Critical vote on WICET's debt repayment this week
IN TWO days lenders to the Wiggins Island Coal Export Terminal are expected to vote on a five-year extension to the September deadline to repay or restructure its $3.75 billion debt.
The extension, reported by The Australian, is said to include interest payments of 4.5 per cent and a 15-year amortisation period.
It remains uncertain if the proposal has the support of Glencore, the largest shareholder in the WICET consortium.
Glencore ships more coal out of WICET than any of the four other coalminers that own the asset, Yancoal, Wesfarmers, New Hope and Aquila.
In its financial statement last year the company said there was "significant doubt" in its ability to remain viable if it did not find a solution for its debt before September.
Since opening the Port of Gladstone facility in 2015, three owners - Bandanna Energy, Caledon Coal and Cockatoo Coal - have collapsed, some partly blaming the expensive take-or-pay arrangement agreed on when the coal price was high.
Pressure has mounted on the remaining owners to sort the mounting debt, with several proposals to change the terms of repayment.
Glencore offered cash up front to pay back some of the loans in exchange for debt relief, and another rejected proposal included repaying senior lenders in full but not junior lenders.
WICET is working with Houlihan Lokey and Fort Street Advisers, while the lending syndicate is advised by McGrath Nicol. WICET owes $3.75 billion in senior debt and about $480 million in junior debt.