WICET owners accept deal in bid to resolve $3.5bn debt

THE owners of Wiggins Island Coal Export Terminal have accepted the financial lifeline offered to help resolve its mounting debt.

The first loads of bedding coal were delivered to the Wiggins Island Coal Export Terminal (WICET) in March, 2016. . Picture: Mara Pattison-Sowden

THE owners of Wiggins Island Coal Export Terminal have accepted the financial lifeline offered to help resolve its mounting debt.

The five miner owners of the Queensland terminal, who owe $3.5 billion to about 20 lenders, have agreed in principal to a proposal put forward by lenders.

The proposal includes deferring the payment to junior lenders ($375 million) but the arrangement for senior lenders would remain the same.

The Australian Financial Review reported both sides committed to work through documentation and have it formalised with credit committees in the coming weeks.

The successful negotiations follows several attempts to change the debt repayments conditions before the September refinancing date.

Owners - Glencore, Yancoal, Wesfarmers, Coronado Coal and Aquila - previously pleaded with lenders to agree to a five- year extension to repay debt.

The looming deadline was a concern for the owners, who said in December there was "significant doubt" in its ability to remain viable if it could find a solution for the debt.

In its annual statement for 2017 the company said if a solution was not found it had "material uncertainty" in its ability to continue operating at a profit.

Queensland Resources Council chief executive Ian MacFarlane said the deal was positive news for the state's export industry, pointing to recent trade figures which showed growth in metallurgical and thermal coal and LNG shipments internationally.

Mr MacFarlane said the latest quarterly figures from Queensland treasury showed thermal coal exports surged by 18 per cent and the worth of LNG exports lifted 15 per cent.

The Observer contacted WICET and Glencore - which ships the most coal out of all owners - but both declined to respond to questions.

The terminal has capacity to ship 27 million tonnes of coal, with 20 million tonnes allocated to its coal miner owners under long-term agreements.

Of the 19 lenders, ANZ is most heavily exposed, having provided $417 million in project finance in 2011.

The Commonwealth Bank, Westpac and NAB each provided $164 million.