May 4, 2021 Read More →

Major NSW coal miner warns of waning Asian financial support

The Australian Financial Review:

Asian lenders’ support for Australian coal miners could dry up if local banks are not willing to participate in lending syndicates, according to the NSW coal miner that narrowly avoided a debt default last year.

Centennial Coal supplies the feedstock for 30 per cent of NSW’s coal-fired electricity but said the next six months would be a “sensitive time” for the company as it raced to refinance debt maturities at a time when Australian banks were increasingly reluctant to lend to fossil-fuel producers.

Centennial said last year’s stay of execution – when lenders provided a 10-month extension on the basis that Centennial’s Thai owner pump $150 million into the company – highlighted that Australian lenders’ support for the industry had deteriorated since its previous refinancing in 2017.

Asian lenders have increasingly stepped in to support the local coal sector as the big four Australian banks have withdrawn, with Whitehaven Coal and Port Waratah Coal Services confirming in the past year that Chinese banks were playing a bigger role in lending syndicates.

But Centennial told a parliamentary inquiry that Asian lenders were unlikely to participate in syndicates for Australian mines if Australian banks were not involved.

[Peter Ker]

More: Coal miner warns Asian lenders won’t fill the void if local banks exit

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