Whitehaven in talks over A$1.2 billion debt due to coal mine delay

MELBOURNE Thu Oct 24, 2013 7:43pm EDT

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MELBOURNE (Reuters) - Australia's Whitehaven Coal is talking to lenders about restructuring a A$1.2 billion ($1.15 billion) debt facility due to delays in building its key growth project, Maules Creek, the miner said on Friday.

Lenders, led by Australia and New Zealand Banking Group (ANZ.AX), had given Whitehaven a covenant holiday on the loan until December 2014, which was meant to coincide with the start of sales from the Maules Creek mine in New South Wales state.

Due to delays in seeking government approvals for the mine, now in hand, and an environmental court challenge, which is due to be ruled on in December, first sales from the project are now expected only in the first quarter of 2015 at best.

"Accordingly we are seeking to amend the facility to reflect the new timeline," Whitehaven said in its quarterly report.

Maules Creek is 15 percent owned by Japanese trading house Itochu Corp (8001.T) and 10 percent owned by Japan's Electric Power Development Co (J-Power) (9513.T), which has an agreement to take coal from the mine.

Whitehaven's shares have halved in value this year due to delays in the Maules Creek project, ramp-up problems at its Narrabri mine and a sharp slump in coal prices. However, the stock rose 2.9 percent to A$1.79 on Friday after a strong quarterly production report.

The company reported a 26 percent jump in equity coal sales to 2.03 million tonnes for the September quarter, and said it had overcome coal quality problems that had earlier resulted in some customers rejecting its product or paying less for it.

($1 = 1.0426 Australian dollars)

(Reporting by Sonali Paul; Editing by Ed Davies)

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