Whitehaven’s $2.65b cash pile can’t soothe carbon-conscious lenders

afr.com:

Whitehaven Coal says it is confident major banks will continue to lend toward its coking coal projects despite failing to find support from climate-conscious banks for a refinancing of a $1 billion debt facility.

Whitehaven had $2.65 billion of net cash at June 30, but that rude financial health was not enough to tempt lenders to renew a long-standing, undrawn $1 billion debt facility when it matured last month.

The lack of interest from lenders cut a stark contrast tothe last time Whitehaven refinanced the $1 billion loan in February 2020, when the miner reported being over-subscribed with interest from lenders.

The price of coal has increased significantly since Whitehaven last secured a lending facility, and yet the company is having trouble finding a bank. AP

Top-quality NSW thermal coal averaged $US161 a tonne over the past three months, well above the $US68 a tonne average price in early 2020 when the revolver was last refinanced, and environmentalists interpreted the news as a moral victory for the campaign against fossil fuels.

Whitehaven chief financial officer Kevin Ball said some banks were lukewarm on lending to miners producing thermal coal for power generation, but he said the company’s strong financial position perversely played a role in the demise of the $1 billion loan.

“It is fairly challenging when you go to a bank and say ‘I have got $2.6 billion on my balance sheet and sir, can I borrow some money?’ Because they look at you and say ‘Why do you need that?’ That certainly played into the conversation,” he said.

“A number of banks took the opportunity to say, ‘You have got plenty of cash and come back and see us when you have got something else you want to do’.”

Whitehaven’s huge cash war chest means