Macquarie Asset Management and Goldman Sachs Infrastructure Partners have hired Evercore to refinance around EUR 1.1bn of debt linked to their Dutch commodity storage company HES International B.V., a deal that raises questions around lending to companies with coal exposure, sources said.

The process, which launched in recent weeks, involves refinancing debt raised from 10 banks by the two owners to help fund their acquisition of the Rotterdam-headquartered business from Riverstone and Carlyle in 2018.

The debt, which was provided by lenders including Dutch banks Rabobank and ABN Amro as well as Lloyds and NatWest, Credit Agricole and Santander, among others, matures in 2025. Amber Infrastructure Group has begun a process to refinance debt linked to its tank storage business, Service Terminal Rotterdam, and further similar deals are expected, according to sources.

Macquarie and Goldman Sachs paid Riverstone and Carlyle around EUR 1.3bn, equal to a roughly 13 times EBITDA multiple, for HES back in 2018 amidst of flurry of deals in the sector, including the sale of Euroports.

But the appetite for the sector has dampened given many tank storage assets handle fossil fuels – although Infracapital’s recent purchase of Vopak’s chemical storage assets shows some funds view the sector as having a positive energy transition story. I Squared Capital owns a 45% stake in Rubis Storage; Patrizia a 90% stake in Vopak Terminal Eemshaven; while Igneo Infrastructure Partners owns Evos, and Ardian Infrastructure holds part of LBC Terminals.

HES International is particularly exposed to fossil fuels given a majority of its terminals across 18 sites and six countries handle coal as well as other commodities. Although coal is the world’s most carbon-intensive fossil fuel, it remains popular, with the International Energy Agency saying that about one-third of global energy generation comes from coal.

Deutsche Bank, an existing lender to HES International, said in recent days that it is “steadily phasing out business with not-to-abate industries such as thermal coal”. Santander, another lender to HES, plans to have no exposure to thermal coal mining worldwide by 2030.

“Coal was already a discussion point in the last refinancing, it will be even more important now that many lenders are pulling back,” said one source. “The borrower will need to have a clear plan to exit the sector.”

HES International’s key terminals at Amsterdam, Liege, Ghlin, Fos-sur-Mer, Maasvlakte, Rotterdam and Terneuzen & Vlissingen all handle varieties of coal, according to HES’ website.

HES, meanwhile, has taken steps to decarbonise its footprint, including planning to develop with Vopak and Gasunie a green ammonia import terminal, ACE Terminal, on the Maasvlakte in the Port of Rotterdam.

The refinancing also takes place as HES deals with the fallout from the insolvency in January of its HES Hartel Tank Terminal, a project to build a 1.3 million cubic metre tank terminal in the Port of Rotterdam.

Although HES International is not directly impacted by Hartel’s insolvency as the bust terminal was ringfenced from the main business, the matter still throws light on the sector’s potential insecurity.

Sources said all equity in Hartel has been wiped out, while lenders were not repaid whole. HES linked the insolvency to COVID-19 and a fire at the terminal, which caused significant delays and additional costs.

HES International, which has around 1,270 staff, recently sold its small storage business at Germany’s inland port of Saarlouis-Dillingen to raise capital for other projects. It also in March sold its tank storage terminals on the River Humber to GIP-backed Peel Ports Group to raise capital for energy transition-related projects, according to the company’s CEO, Cees van Gent.

Cees van Gent replaced HES’ former CEO, Daan Vos, who had spent just over three years in the role. HES also appointed a new chief operating officer and chief commercial officer earlier this year.

Macquarie Asset Management bought its 50% stake in HES via its 12-year, 2016-vintage USD 4bn Macquarie European Infrastructure Fund 5. Goldman Sachs Infrastructure Partners acquired its 50% holding via West Street Infrastructure Partners III, a USD 2.5bn, 15-year fund with a 2015 vintage.

Goldman Sachs, Macquarie Asset Management and Evercore declined to comment.