New desperate plan to fix coal terminal's billions in debt
THE board and management of Wiggins Island Coal Export Terminal are preparing to kick one of their biggest challenges, mounting debt.
WICET has proposed a deal to its 19 lenders to bring together arguably the port's two biggest shareholders - lenders who are collectively owed $3.66 billion and mining giant Glencore - by September next year.
Sources told Fairfax the proposal stopped short of a debt-for-equity swap or a radical capital restructure, and instead aimed to soften agreed take-or-pay contracts, which guarantee revenue at the port.
Since opening the Port of Gladstone facility in 2015, three owners - Bandanna Energy, Caledon Coal and Cockatoo Coal - have collapsed, some partly blaming the take-or-pay deal.
Demonstrating the rising costs for WICET's owners, a Caledon Coal administrator's report said the terminal's handling charge rose from A$14.16/t in 2016 to A$21.83/t in 2017.
It's believed WICET is considering feedback from lenders before presenting the proposal to shipper shareholders.
WICET owes about $3.9billion in senior debt to a lending syndicate along with $US375million of junior debt.
It has been previously reported major owner Glencore offered cash up front to pay WICET's loans.
The upfront pay out was rumoured to be in exchange for debt relief for Glencore, amid talks around a new funding model instead of the take-or-pay agreement.
Other owners include Wesfarmers, New Hope, Yancoal and Aquila.
It's believed lender ANZ is the most heavily exposed, having provided $417million worth of project finance in 2011, while CommBank, Westpac and NAB each chipped in $164million.