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Adani rethinks Abbot Point options after debt refinancing stalls

Published 08/03/2018, 07:18 pm
Updated 08/03/2018, 07:20 pm
Adani rethinks Abbot Point options after debt refinancing stalls
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SYDNEY/HONG KONG, March 8 (Reuters) - India's AdaniEnterprises Ltd ADEL.NS is looking at new options to refinancedebt for its coal terminal in Australia after struggling toattract lenders wary of its controversial Carmichael mineproject, Thomson Reuters Loan Pricing Corp reported on Thursday.

Adani Abbot Point Terminal Pty Ltd (AAPT) launched a loan ofup to A$500 million ($391 million) last August to partiallyrefinance A$580 million due in October, according to ThomsonReuters LPC data.

After seven months, IDFC Singapore, the arranger for theloan, has yet to receive any firm commitments, despite offeringa generous 200 basis point margin over the bank bill swap rateand the option to commit in U.S. dollars or yen, two peoplefamiliar with the situation said.

"The Abbot Point terminal is a good asset and has raiseddebt previously. But the noise around the Carmichael mine wastoo much for lenders," one of the people said.

Adani is looking at alternate sources of funding frommarkets such as Japan, South Korea and Taiwan, where coal fromthe port goes, according to a person familiar with the matter,and it is now seeking a smaller A$300 million loan.

The sources declined to be named due to the sensitive natureof the situation.

"We have successfully refinanced A$660 million of the A$976million Abbot Point Coal Terminal (debt). We are confident ofrefinancing the balance," said a spokeswoman for AdaniAustralia.

Adani succeeded in raising $500 million through a five-yearbond last December, which some believe should alleviate therefinancing pressure it faces in the coming months.

AAPT had A$976 million in bonds and loans due by November,according to rating agencies. The A$580 million being refinancedis part of a A$790 million loan signed in 2013.

Adani's proposed Carmichael coal mine has been the target ofa campaign by environmental and indigenous groups concernedabout climate change and damage to land and water.

Banks have also shied away in a global pullback fromfinancing fossil fuels. As a result, Adani has yet to line upfunding for the A$4 billion first stage of the Carmichael mine.

AAPT's loan was not linked to the mine, but the surroundingcontroversy has taken its toll even though some lenders showedinterest in the refinancing.

Unlike the mine, AAPT is a performing asset. It haslong-term "take-or-pay" contracts with coal exporters such asGlencore Plc GLEN.L and Japan's Mitsubishi Corp 8058.T andSumitomo Corp 8053.T , among others, which serve as security onAAPT's refinancing.

($1 = 1.2776 Australian dollars)

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