Highlights

  • Coronado plans a financial support transaction with Stanwell to improve liquidity position.
  • The deal extends the existing coal supply agreement to 2043.
  • Stanwell to provide a USD 265M, five-year facility replacing Oaktree’s loan.

Coronado Global Resources Inc. (ASX:CRN) has announced its intention to enter into a financial support transaction with Stanwell Corporation Ltd. The proposed deal aims to enhance Coronado’s short- and long-term financial stability while supporting local employment and energy supply in Queensland.

The transaction is currently non-binding and remains subject to due diligence, long-form documentation, and necessary approvals expected to be completed during November 2025.

Key Terms of the Arrangement

Under the proposal, Coronado’s existing New Coal Supply Agreement (NCSA) with Stanwell will remain effective, with the end date extended from 2037 to 2043. The revised agreement allows Stanwell a broader nomination range between 1.2 and 2.24 million tonnes per year, offering greater operational flexibility.

The existing asset-based loan facility with Highland Park XII Pte. Ltd, an affiliate of Oaktree Capital Management, L.P., will be replaced by a USD 265M, five-year facility provided by Stanwell. The loan will carry an interest rate between 9% and 12% and will include significant covenant flexibility.

Stanwell will hold first-priority security over Coronado’s working capital assets and second-priority security over other fixed assets. It will also maintain a lower-ranking security position for Coronado’s NCSA obligations.

Liquidity and Prepayment Structure

From the beginning of 2026, Stanwell will waive rebate payments under the Amended Coal Supply Agreement (ACSA). Additionally, Stanwell will provide ongoing financial support through prepayments for future NCSA coal deliveries. These prepayments will be limited to the number of discounts that Stanwell would have received under the ACSA and NCSA.

Prepayments will be made only in months when Coronado’s cash balance falls below USD 250M. These advances will accrue a competitive fixed interest rate, with capitalisation capped to manage financial exposure.

In months where Coronado’s cash balance exceeds USD 300M, the company will deliver previously prepaid coal shipments at no cost to reduce outstanding prepayment balances.

Dividend and Liquidity Conditions

If Coronado declares dividends, it will be required to maintain a minimum liquidity balance of USD 300M after such payments, any senior note repurchases, and proportional reductions in prepaid balances. This framework is designed to ensure financial discipline and support balance sheet deleveraging in alignment with the cyclical nature of the coal industry.

The proposed agreement is expected to support employment certainty for approximately 2,500 people in Central Queensland and contribute to meeting over 10% of Queensland’s energy requirements, subject to final approvals and execution of definitive agreements.

CRN shares are currently trading at AUD 0.320 per share, slightly down by 3.030% from its previous close of AUD 0.330.