Deutsche Bank AG has sold part of a $600 million loan intended for the acquisition of an Australian coal mine to private credit funds. The German lender recently sold approximately $120 million—half of its exposure—to Australian and Asian credit funds, including Income Asset Management Group Ltd., Regal Funds Management, and Keyview Financial Group. Sources familiar with the transaction, who requested anonymity due to the private nature of the matter, provided this information.
Initially, Deutsche Bank held about 40% of the loan, which supports a consortium led by Golden Energy and Resources in acquiring the Illawarra coking coal mine in Australia. The bank plans to retain the remaining portion of its loan. This transaction highlights the increasing role of private credit funds in funding coal and other fossil fuel-related projects, as traditional banks distance themselves due to environmental, social, and governance (ESG) concerns.
Deutsche Bank, Income Asset, and Regal Funds all declined to comment on the transaction when contacted. Keyview did not respond to emails requesting comment.
The Golden Energy-led consortium signed the $600 million loan agreement in July with Deutsche Bank and several private credit funds. These funds include Davidson Kempner Capital Management LP, Farallon Capital Management LLC, King Street Capital Management LP, Washington H. Soul Pattinson & Co., and Broad Peak Investment Advisers Pte. The consortium also secured a separate $150 million working capital loan and a A$150 million ($100 million) guarantee facility.
The entity acquiring the mine, GEAR M Illawarra Met Coal, mandated Grant Samuel as an adviser in its fund-raising efforts. This information was reported by Bloomberg in March. Singapore-based Golden Energy, controlled by Indonesia’s Widjaja family, owns a 70% stake in GEAR M Illawarra Met Coal. M Resources Pty. holds the remaining 30%.
The Illawarra coking coal mine is a significant asset within the Australian coal mining industry. This acquisition reflects the strategic importance of coal in global energy markets, despite growing pressures to shift towards renewable energy sources. The deal’s complexity underscores the challenges and opportunities in financing large-scale fossil fuel projects.
Private credit funds have been increasingly stepping in to provide financing for projects that face difficulties in securing funds from traditional banks. These funds are less constrained by regulatory pressures related to ESG concerns. As banks face mounting scrutiny and regulations aimed at reducing investments in fossil fuels, private credit funds have emerged as viable alternatives, offering necessary capital for such ventures.
