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Yancoal prepays massive debt

Monday, October 3rd, 2022

ASX-listed coal miner Yancoal will repay $1-billion of debt on October 4, from available cash.

The company said on Monday that its decision to undertake another debt prepayment was made possible by the robust coal prices and its focus on optimising its capital structure to deliver future value to shareholders.

The prepayment consists of payments toward the existing syndicated facility and its unsecured related-party loans, and is expected to deliver a near $207-million reduction in total finance costs over the loan periods.

“Combined with debt prepayments in October 2021 and July 2022, the planned $1-billion debt prepayment results in Yancoal prepaying over $2.3-billion of debt in the last 12 months,” said CEO David Moult.

“After completing the prepayment, Yancoal will have $792-million of total debt, the majority of which is the $301-million due in the second half of 2024 and the $307-million due in the second half of 2026, respectively. The debt maturity profile is substantially improved after the prepayment, with the debt expiry date more evenly distributed in the next five years.

Yancoal continues accumulating cash and has maintained a strong net cash position since July 2022; it will report its cash balance for the end of September 2022 in the third quarter production report. 

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