The facility has a term of five years with principal repayable in regular instalments from June 2015.

Yancoal chief executive officer Murray Bailey said it was provided on an unsecured basis with no covenants and at an attractive interest rate.

“The loan provides confirmation of the support that our majority shareholder is willing to provide for Yancoal,” he said.

The facility funds the payment of the promissory notes in connection with the capital return for previous Gloucester Coal shareholders.

Last July Yanzhou Coal launched an $A8 billion merger with Gloucester and its Australian Yancoal subsidiary through a scheme of arrangement which saw the Chinese giant own 77% of Australia’s largest independent coal mining company.

Under the terms of the proposal, Gloucester shareholders were given $3.20 in cash and the option to receive either shares in the merged company or a combination of shares and contingent value rights through a scheme of arrangement.

The merger valued Gloucester at $2.1 billion.

The merged companies have a strong presence in the Hunter Valley of New South Wales, with combined coal production of 15 million tonnes per annum.