COAL miner Golden Energy and Resources (Gear) on Tuesday (Nov 1) announced that it is looking to restructure or exit all or substantially all of its energy coal business.

 

To this end, its outstanding US$285 million 8.5 per cent senior secured notes due 2026 have been offered for exchange for new notes of the same value due 2027.

 

The mainboard-listed company said it has mandated Mandiri Securities as dealer manager.

 

The exchange offer is made on terms and conditions set out in its exchange offer memorandum dated Nov 1, it said.

 

The new notes will be unconditionally and irrevocably guaranteed by the subsidiary guarantor and secured by the collateral, it added.

 

The exchange offer expires 5 pm, Nov 21.

 

The rationale for the exchange is that the company is taking the view of &ldquo loosening certain covenants currently in the indenture governing the existing notes&rdquo , Gear said.

 

These relaxations include changes in the financial ratios in the debt covenant and other amendments to permit the company to restructure or exit all or substantially all of its energy coal business, in line with its plan to reduce its exposure to energy coal, Gear said.

 

However, it added that there is no certainty as to when such restructuring will be undertaken or completed, if at all.

 

The announcement of the final aggregate principal amount of the existing notes accepted for exchange will then be made &ldquo as soon as practicable&rdquo after the expiration deadline.

 

The new notes are expected to be listed around Nov 28.

 

Gear reported an 81.9 per cent increase in revenue from its energy coal business for the six months ended Jun 30 to US$1.3 billion, compared to the same period last year.

 

For the first six months of the year, the energy coal segment accounted for 54.9 per cent of its revenue, compared with 90.9 per cent in the year-ago period.

 

During the same six-month period, the share of revenue for metallurgical coal rose to 45.1 per cent this year, compared to 9 per cent last year.