Whitehaven Coal Ltd (ASX: WHC) shares are tumbling today.
Shares in the S&P/ASX 200 Index (ASX: XJO) coal stock closed yesterday trading for $8.39. In early afternoon trade on Friday, shares are changing hands for $7.81 apiece, down 5.7%.
For some context, the ASX 200 is down 0.4% at this same time. But most energy stocks are doing it tougher today, as witnessed by the 2.1% decline in the S&P/ASX 200 Energy Index (ASX: XEJ).
Taking a step back, Whitehaven Coal shares remain up 62.7% over 12 months, smashing the 15.9% one-year returns delivered by the benchmark index. And that's not including the 10 cents a share in fully-franked dividends the coal miner paid eligible stockholders over this time.
Now, here's how the company just secured a major liquidity boost.
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Whitehaven Coal shares ramping up liquidity
In intraday trade today, Whitehaven announced that it has entered into a new US$600 million (AU$853 million) senior secured syndicated facility with a duration of 4.5 years.
The new facility consists of a US$475 million term loan and a US$125 million revolving credit facility.
The ASX 200 coal stock said it has also received bank credit approvals for an additional US$150 million. Management is maintaining the option to upsize this facility as part of Whitehaven's current refinancing process.
"The support from banking partners reflects confidence in Whitehaven's financial discipline, cash flow generation and prudent approach to capital management," Whitehaven managing director and CEO Paul Flynn said.
The new loans are intended to support Whitehaven Coal shares by increasing the miner's liquidity position, extending its debt maturity profile, and reducing its funding costs. The miner noted that it will now also have more flexibility to support its operations and capital management objectives.
What did management say?
Commenting on the new funding arrangements intended to support Whitehaven Coal shares over the longer term, Flynn said:
With Whitehaven's strengthened credit profile and successful integration – and initial improvements – of the Daunia and Blackwater metallurgical coal operations, we are focused on refinancing our acquisition credit facility and establishing a capital structure with more diverse, longer tenor and lower cost debt facilities.
The successful execution of the new senior secured syndicated facility, with a headline rate of around 6%, further strengthens our funding flexibility, extends our maturity profile, materially reduces our funding cost and improves our weighted average cost of capital.
With an eye on Whitehaven Coal stockholders, Flynn concluded:
We look forward to completing the refinancing of the balance of our acquisition credit facility and delivering on our broader financing objectives including delivering value for our shareholders.
