News: TER Australian coal producer Terracom notes refinancing risk

MELBOURNE, Sept 1 (Reuters) - Australian thermal coal producer Terracom (TER) said on Tuesday that refinancing risks linked to a large eurobond repayment due next year had raised uncertainty over its ability to stay in business, as it logged a steep loss in its full year results following the sale of two Mongolian coal mines.

Terracom logged a net loss after tax of A$146.1 million ($108.08 million), down from a loss of $11.3 million the prior year due mostly to its sale of Mongolian assets for which it booked a $101.3 million loss.

Terracom has a liability of A$215 million ($159.06 million) due to a Listed Euroclear Bond which is due to reach maturity on 30 June 2021, it said in the notes to its results filed with the Australian exchange.

"Significant progress had been made on refinancing this facility," Terracom said.

However, as part of its strategy to diversify its asset and geographic base, which led to its purchase of South African coal producer Universal Coal, "the directors made the conscious decision to put the refinance on hold."

"The refinancing risk gives risk to uncertainty as to the Group’s ability to continue as a going concern," it added.

Global coal producers have been hit hard this year by a steep drop in thermal coal prices as more power users turn to cheap natural gas and renewables, a trend compounded by coronavirus-triggered lockdowns that hit demand.

Australia's Whitehaven Coal (WHC) posted a 95% plunge in annual profit last week.

Benchmark Newcastle coal prices last traded at $52 a tonne, posting a small recovery from 4.5 year lows below $50 plumbed in mid August, but still down 23 percent on the year.

Terracom bought South African coal producer Universal Coal in a move to diversify its business in July.

($1 = $1.0000)

($1 = 1.3517 Australian dollars)