Adani’s Australian Port Secures Loan For Refinancing After Credit Risk Warning

The Adani Group-led North Queensland Export Terminal (NQXT) in Australia is set to secure a private credit loan worth $207 million, just a few months before the due repayment of an existing loan of the same amount. 

According to a Bloomberg report, American investment firm King Street Capital and UK-based asset manager Sona Asset Management are financing the loan, which has a six-year tenure. 

The development comes a month after S&P Global Ratings downgraded the credit outlook for the Gautam Adani-led coal port from "stable" to "negative," citing delays in refinancing the loan. 

"North Queensland Export Terminal Pty Ltd.'s (NQXT) refinancing of A$329 million ($207 million) in bullet debt due in June 2025 is likely to be delayed compared with our previous expectation," the ratings agency said on January 28, adding that the port is now expected to complete refinancing by mid-February 2025 instead of the earlier timeline of January 2025. 

Last year, Farallon Capital Management and King Street reportedly provided a loan of around $333 million to the company. 

Controversial Port with Refinancing Issues 

Located 25 km northwest of Bowen, Queensland, NQXT is Australia's northernmost coal port. Operated by the Adani Group, it has a capacity of 50 million tonnes per annum (mtpa), with 80% of this capacity secured through long-term agreements. 

The port has faced intense opposition from environmentalists globally, and financial institutions have grown increasingly wary of coal exposure due to concerns about damage to the Great Barrier Reef. According to a Queensland government report, all anchorages at the port are located within the Great Barrier Reef Marine Park. 

Adani rebranded the controversial port in 2020 as financiers reportedly began abandoning the business due to environmental concerns and legal challenges. 

According to S&P, NQXT's coal port operations remain stable, with expected coal volumes of 36 million metric tons in the fiscal year 2025. The company has a total debt limit of A$950 million ($616 million), including a A$450 million ($283 million) loan due in April 2030, with scheduled repayments twice a year. The firm earns 1.55 times the amount needed to cover its loan payments, which is a positive sign.

However, S&P Global had said that If NQXT fails to secure refinancing at least three months before the due date, its credit rating may be downgraded, making future borrowing more expensive.