Whitehaven faces risk of funding squeeze amid coal price concerns
Having successfully secured two BHP coal mines last year – and the funding to pay for them – Whitehaven is riding high. But analysts are now asking, is this as good as it gets?
Whitehaven is facing risks of funding squeeze later this year despite successfully refinancing debts with private credit investors, with analysts raising concerns about a potential slide in coal prices and poor weather at one of the mines it acquired from BHP in a transformative deal.
The ASX-listed coal miner successfully refinanced $US900 million in debt in December, a key step in shoring up its balance sheet after it won the auction for BHP’s Blackwater and Daunia mines in Central Queensland with a $5 billion bid.
But Bell Potter analysts James Williamson and Stuart Howe last week said the company will still require a further USD100 million in debt funding by the end of the June quarter, which will push its net gearing level to 20%.
Whitehaven’s share price has performed strongly since it agreed to acquire the BHP mines, rising 17.7% since in October. But short interest has increased significantly over the last month to 2.45%, suggesting some concerns in the market about the sustainability of the recent rise.
