Home > Adani repays massive coal port debt out of own pocket

Adani repays massive coal port debt out of own pocket

23 December 2022

23 December, 2022

Ratings agency Moody’s has confirmed (paywalled) that Adani Group has had to pay back the US$500m of bonds issued by its NQXT coal port (formerly Adani Abbot Point Terminal) from its own pocket. The bonds matured on 15 December 2022.

NQXT, situated in the Great Barrier Reef World Heritage Area, is an essential part of the disastrous Adani Carmichael coal project, being the port via which all Carmichael coal is being exported.

Since 2020, Adani has been unable to externally refinance three of NQXT’s four maturing debt tranches, demonstrating how toxic this project is to potential investors and creditors. In 2020 NQXT postponed a bond issue, which has never eventuated, and the company repaid A$270 million in total for two tranches of debt coming due that year out of Adani’s own funds. In 2021 it seems to have successfully refinanced US$140 million of debt via the US private placement market, but once again in 2022 it was unable to find any external creditors for the half-billion dollars worth of bonds.

In 2021 and 2022 Market Forces reached out to NQXT bondholders, making sure they were aware of the destructive nature of Adani’s coal operations in Australia and the role that NQXT plays in that destruction. We received replies from several that they had either sold their bonds or committed not to invest any further in NQXT once their bonds matured.

113 major companies, including many banks and major investors have ruled out any involvement with Adani’s climate-wrecking Carmichael project, mainly due to the reputational risk of being linked to such a controversial development. This includes entities which have previously helped NQXT raise debt, such as Investec and FIIG.

Take action: tell Haitong, Emirates NBD Capital and Stifel to rule out any future financing of the NQXT coal port.

Take action!

The drain on Adani’s finances may continue. Under public pressure, a group of Korean creditors that provided funds in 2018 and 2019 have now pledged no further investment in Adani’s coal port and will cut all ties once their existing debts mature in coming years. These include Samsung Securities, Hanwha Investment and Securities, Korea Investment and Securities, Industrial Bank of Korea, and Mirae Asset Daewoo.

However, there are still some banks, previously linked to NQXT, which are yet to rule out providing assistance to the port. Take action to ask Haitong, Emirates NBD Capital and Stifel to rule out any future financing of the coal port.

Take action!

Tell Haitong, Emirates NBD Capital and Stifel to rule out any future financing of the NQXT coal port.

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Email to existing creditors
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I am writing to ask that your company does not participate in any further financing of North Queensland Export Terminal or NQXT (formerly known as Adani Abbot Point Terminal). NQXT is an essential component of the controversial Carmichael thermal coal export project with all the coal extracted from the Carmichael mine intended to go through NQXT. This means that by financing the port, your company is supporting the Carmichael coal export project. Continuing to do this will generate significant reputational risks for your company. Not only do the majority of Australians oppose Adani’s coal mine, the project is being contested by Traditional Owners who have not given their consent to the mine, it has cleared endangered species habitat, will drain billions of litres of precious water resources and add millions of tonnes of carbon to the atmosphere. Helping NQXT means you risk being associated with a massive new thermal coal mine in a new coal basin, and being seen as partly responsible for one of the biggest potential sources of new carbon emissions on the planet. NQXT itself has been fined [1], several times [2], for polluting nearby wetlands. In addition, NQXT has had some difficulty refinancing its debt with a bond issue planned for early 2020 cancelled. Adani was forced to repay $270 million for two tranches of debt coming due in 2020 out of its own funds. This difficulty to refinance, as well as ESG risks associated with the port's link to Carmichael, are the primary reasons both S&P Global and Fitch have respectively downgraded the rating and outlook of NQXT bonds [3]. I urge you to rule out further financial support for the Adani Abbot Point Terminal/North Queensland Export Terminal and all entities associated with the disastrous Carmichael coal project. I hope to hear from you soon in response to my concerns. [1] https://www.australianmining.com.au/news/adanis-abbot-point-coal-gets-12k-fine-stormwater-release/ [2] https://www.brisbanetimes.com.au/national/queensland/adani-fined-after-stormwater-flows-into-north-queensland-wetlands-20190326-p517m2.html [3] S&P Global Ratings https://www.spglobal.com/ratings/en/research/articles/210329-research-update-north-queensland-export-terminal-rating-lowered-to-bb-on-refinancing-risks-outlook-negati-11897266 Fitch Ratings https://www.fitchratings.com/research/infrastructure-project-finance/fitch-revises-outlook-on-north-queensland-export-terminal-to-negative-affirms-at-bb-20-09-2021
Email to bond arrangers
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Back in 2020, you were named as one of the companies working to raise finance for the Adani owned North Queensland Export Terminal or NQXT (formerly known as Adani Abbot Point Terminal). This port will be used to ship all of the thermal coal mined from the controversial Adani Carmichael coal mine and thus is a critical part of the Carmichael project. Refusing to rule out any further provision of services to NQXT poses a significant reputational risk for your company. In the midst of an urgent climate crisis, the Carmichael coal mine would produce enough coal over its lifetime to emit 4.6 billion tonnes of CO2, equivalent to over eight years of Australia’s annual greenhouse gas emissions. At the local level it is being contested by Traditional Owners who have not given their consent to the mine and it threatens water supplies and agricultural production. It would also increase industrialisation in the already distressed Great Barrier Reef World Heritage Area. All this has made the Carmichael coal mine arguably the most environmentally and socially contentious project in Australia’s history. A survey in 2018 found 65% of respondents either opposed or strongly opposed Adani’s Carmichael mine. Based on the information above, I consider your willingness to provide financial services to NQXT as support for the climate-destroying Carmichael coal project. I urge you to publicly commit to permanently cut ties with NQXT and all Adani entities linked to Carmichael coal. I hope to hear from you soon in response to my concerns.
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