Oaktree Capital Management has purchased $36m of debt from ANZ Bank in the coal-fired Bluewaters Power Station in Western Australia for 71c in the dollar, say lending sources.
It comes as the partial owner of the power station, Sumitomo, is believed to be planning to buy out the debt from other lenders, with the $19bn Japanese financial group understood to be offering 64c in the dollar.
Sumitomo owns half the asset and the other owner is Kansai Electric.
Meanwhile, debt is also expected to trade in the company MMA Offshore, with its lenders ANZ, CBA and NAB among its consortium of seven banks.
As revealed by DataRoom, Sumitomo is understood to have hired restructuring firm Houlihan Lokey for Bluewaters Power Station, as a debt repayment deadline approaches for the asset, which owes $400m.
The fact the power station is coal-fired means securing bank debt is seen as a near impossible feat.
Debt is due to be paid in August
The power station, 4.5km northeast of Collie, was built by Griffin Energy in 2009.
The power station has a total electricity generation capacity of about 430 megawatts.
Attempts to secure hundreds of millions of dollars to refinance the asset have been made over the past months.
Earlier, some predicted owners would have to stump up equity to ensure Bluewaters continues to operate.
Banks have shied away from gaining exposure to thermal coal-related assets as concerns grow about climate change and the impact of coal on the environment.
McGrath Nicol is working with the lenders, along with law firm G+T, while Japanese bank MUFG is working as the financial adviser to the Bluewaters company.
Law firm Clayton Utz is also working for Sumitomo.
Meanwhile, MMA Offshore is listed and supplies and maintains oil rigs and their offshore infrastructure and has been working with adviser Deloitte, while lenders have been aided by law firm Allens.
Three years ago, the company was on the radar of hedge funds after failing to meet its debt obligations.
The rising oil price offered a much needed lift to the operation, but the oil price has since collapsed on the back of COVID-19.
The largest investor is hedge fund Black Crane Capital, which is understood to own about 19 per cent of the company.
Its market value is currently $53.7m and in June, it told the market that it had received waivers to conditions from its lenders.
At December, MMA’s brorrowings amounted to $275m and the debt was due to expire in September next year.
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