Houlihan Lokey Advises Kestrel Coal

Houlihan Lokey is pleased to announce the successful US$860 million refinancing and recapitalisation of Kestrel Coal Group Pty Ltd. (Kestrel) with a syndicate of Australian and international banks. Kestrel’s new facilities are the largest financing package for an Australian coal producer in 2022. Houlihan Lokey acted as the sole financial advisor to the company.

Kestrel is the 80% owner and operator of the Kestrel Coal Mine, an underground longwall coal mine located in the Bowen Basin in Central Queensland, Australia. Kestrel Coal Mine is one of the world’s most productive underground metallurgical coal mines and primarily markets a low ash hard coking coal product, which is exported to a diversified base of high-quality customers across Asia. The company is jointly owned by EMR Capital and Adaro Energy.

Houlihan Lokey was engaged to conduct a complete strategic review of Kestrel’s existing capital structure and to identify and implement a long-term sustainable capital structure plan—which involved assessing refinancing alternatives, including local and international banks, high-yield bond markets, and private credit. Houlihan Lokey advised the company and sponsors with respect to each of these processes alongside and in connection with each other to maximise competitive tension and the options available to the company, and to identify the optimal financing solution available in an increasingly volatile market.

Buoyed by improved coal prices and strong operating and financial performance, Kestrel completed its new bank refinancing on 14 November 2022, which fully recapitalised the company and delivered on key company and sponsor objectives.

Houlihan Lokey led all aspects of the transaction, including structuring, negotiations with the banking syndicate, financial analysis and modelling, and managing communications amongst many other work streams.

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