A consortium led by Singapore's Golden Energy and Resources has secured $850 million to buy South32's (S32.AX), opens new tab Australian coking coal assets, two sources told Reuters, as private credit continues to fill a funding gap for the largely debanked sector.

A syndicate of five private credit lenders and one global investment bank will lend $600 million to GEAR M Illawarra Met Coal for its purchase of South 32's Illawarra metallurgical coal business, two sources familiar with the matter said on Sunday.

South32 said in February it had agreed to sell the business in New South Wales state for $1.65 billion, exiting coal to focus on expanding in copper and zinc.

GEAR is majority owned by Indonesia's Widjaja family, and will hold 70% of the consortium while privately held Australian coal company M Resources will own the rest.

The funding round contains an additional $150 million in working capital and A$150 million ($100 million) in guaranteed facilities provided by banks and insurers, said the sources.

The facility is for five years, with a coupon at 850 basis points above benchmark U.S. overnight financing rate SOFR. Grant Samuel was mandated advisor.

Grant Samuel and GEAR did not respond to emailed requests for comment outside of normal business hours. M Resources declined to comment.