Skip to content

Article/Intelligence

GEAR Signs $850M-Equivalent Facilities for Illawarra Met Coal Acquisition, Including $600M 5Y Private Credit 

Share on X (opens in a new window) Share on Facebook (opens in a new window) Share on LinkedIn (opens in a new window)

A consortium led by Singapore-based miner Golden Energy and Resources Pte Ltd., or GEAR, has signed $850 million-equivalent facilities backing the acquisition of Australia’s Illawarra Metallurgical Coal, or IMC, including a $600 million five-year loan from private credit funds at around SOFR+ 800bps to 850bps, said two sources with knowledge of the situation.

The other debt funding backing the $1.65 billion acquisition comprises a $150 million working capital facility and an AUD 150 million ($100 million) guarantee facility, the sources said.

The seller of the mine is ASX-listed South32 Ltd.

Bloomberg reported earlier today that lenders to the $600 million facility include Farallon Capital Management, King Street Capital, Washington H Soul Pattinson, and Broad Peak Investors, with Deutsche Bank joining as the sole bank lender.

Many of the lenders were among the group that provided a $625 million, 11.5% senior secured five-year loan-note acquisition facility to the Widjaja-family-backed GEAR’s Stanmore SMC Holdings Pty Ltd. in early-2022, according to the sources. The facility was raised to part-finance Stanmore’s acquisition of BHP Minerals Pty Ltd.’s 80% interest in BHP Mitsui Coal Pty Ltd. by purchasing the entire share capital of shareholding vehicle Dampier Coal (Queensland) Pty Ltd., as reported.

The IMC acquisition deal, announced in February, prompted GEAR to launch a consent solicitation in June to amend the indentures of its outstanding $346.3 million 8.5% senior secured notes due 2027 to carve out headroom for the financing needed to complete the acquisition, as reported.

The share sale and purchase agreement, or SPA, to acquire IMC was signed on Feb. 29, 2024 between GEAR M Illawarra Met Coal Pty Ltd (BidCo), which is 70% owned by GEAR, through certain intermediate holding companies including Golden M NSW Pty Ltd (HoldCo) and GEAR M NSW HCC Pty Ltd (MidCo), with, among others, South32 Ltd., as also reported.

The IMC acquisition was to be funded in part by:

  • a new acquisition debt facility of up to $650 million at MidCo, an entity 70% indirectly owned by GEAR and 30% indirectly owned by M Resources Pty Ltd., to be guaranteed by HoldCo;
  • a $200 million term loan facility from a lender at a new wholly-owned finance subsidiary of GEAR, to be guaranteed by GEAR, a subsidiary guarantor and a new wholly-owned special purpose vehicle of GEAR (New SPV) holding a 70% interest in HoldCo; and
  • GEAR’s existing cash on hand.

Golden Energy did not respond to calls or emails requesting comment.
 

This publication has been prepared by Octus, Inc. or one of its affiliates (collectively, "Octus") and is being provided to the recipient in connection with a subscription to one or more Octus products. Recipient’s use of the Octus platform is subject to Octus Terms of Use or the user agreement pursuant to which the recipient has access to the platform (the “Applicable Terms”). The recipient of this publication may not redistribute or republish any portion of the information contained herein other than with Octus express written consent or in accordance with the Applicable Terms. The information in this publication is for general informational purposes only and should not be construed as legal, investment, accounting or other professional advice on any subject matter or as a substitute for such advice. The recipient of this publication must comply with all applicable laws, including laws regarding the purchase and sale of securities. Octus obtains information from a wide variety of sources, which it believes to be reliable, but Octus does not make any representation, warranty, or certification as to the materiality or public availability of the information in this publication or that such information is accurate, complete, comprehensive or fit for a particular purpose. Recipients must make their own decisions about investment strategies or securities mentioned in this publication. Octus and its officers, directors, partners and employees expressly disclaim all liability relating to or arising from actions taken or not taken based on any or all of the information contained in this publication. © 2025 Octus. All rights reserved. Octus(TM) and the Octus logo are trademarks of Octus Intelligence, Inc.