Coronado Global Resources finalises $150m ABL facility to improve financial stability
Pure play metallurgical coal producer Coronado Global Resources (ASX: CRN) has moved to stabilise its financial position with the refinancing of the company’s existing asset-based lending (ABL) facility.
Subsidiary Coronado Finance has entered into a binding commitment letter for refinancing of the facility with Highland Park XII, an affiliate of Oaktree Capital Management.
The company will secure the three-year ABL facility against certain receivables and inventory assets, with the company able to draw an initial $75 million at financial close and an additional $75m in minimum increments of $25m for a further 12 months thereafter.
‘Important first step’
“Entering into this transaction with Oaktree is an important first step in our strategy to stabilise and strengthen our financial position,” chief financial officer Barrie Van der Merwe said.
“This facility gives us the flexibility we need to provide an upfront cash injection and fund future working capital needs while we continue executing on our broader liquidity plan.”
“It reflects a clear confidence from a credible lender in the underlying value of our asset base and business fundamentals.”
“Importantly, the way the covenant thresholds are designed provides us with flexibility to navigate the challenging current commodity price environment.”
Liquidity management
Mr Van der Merwe said the new transaction forms part of a more comprehensive liquidity and balance sheet management program.
This includes a focus on the Mammoth and Buchanan expansion projects that are on track and on budget.
“The completion of these projects is expected to result in a sales volume increase and lower capital expenditure in the second half, and significant sustainable operating cost reduction,” he said.
Strategic improvement
The company believes the Mammoth underground project will provide it with several strategic improvement opportunities at the Curragh complex in Queensland.
It expects to end the 2025 calendar year with run-rate production of between 1.5 million tonnes and 2Mt and 1Mt at the Buchanan expansion in the US.
Coronado has mining operations and development projects in the Bowen Basin in Queensland and the Central Appalachian region of the United States.