Billionaire’s Mine Financing Hurdles Fuel Bondholder Jitters – by Ruth Liew and Perry Williams (Bloomberg News – December 7, 2017)

The Indian conglomerate Adani Enterprises Ltd. is learning how one financing problem can lead to headaches for debt investors elsewhere as it tries to secure money for one of the world’s biggest coal mines.

Three of China’s largest banks this week ruled out any involvement in financing the mine in Australia’s Queensland state. That fanned investor concerns about debt elsewhere in the company’s businesses in the South Pacific nation.

Dollar bonds from wholly owned unit Adani Abbot Point Terminal Pty — which oversees a deep water port on the coast of Queensland — sunk to fresh lows after the news.

While Adani’s port business is financed separately from its mining division, the company intends to transport coal sourced from its planned Carmichael mine by rail to the export terminal at the port.

Industrial & Commercial Bank of China Ltd., Bank of China Ltd., and China Construction Bank Corp. all said this week they won’t loan money to develop the Carmichael mine.

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