Why the Coronado (ASX:CRN) share price dropped 14% today

The Coronado Global Resources Inc (ASX: CRN) share price plummeted today following an institutional entitlement offer from the company.

| More on:
Sad looking miner holding his head down.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares in Coronado Global Resources Inc (ASX: CRN) were plummeting today as they resumed trading following an institutional entitlement offer. By close of trade, the Coronado share price had fallen 14.29% to 51 cents. 

The coal producer announced the equity offer on Tuesday. Today was the first day the company's shares were eligible for trading following the news, and the market's reaction wasn't kind.

Let's take a closer look.

$114 million entitlement offer

On 4 May, Coronado advised that it planned to perform an equity offering, with the aim of raising $100 million.

Coronado reported today that it raised $114 million in its institutional entitlement offer, at an offer price of 45 cents per new CHESS Depository Interest (CDI). Each CDI represented a beneficial interest in one-tenth of a share in the company.

Coronado advised that Energy & Minerals Group, through its affiliate Coronado Group LLC, purchased approximately 72 million CDIs to maintain a hold of at least 50.1% of the CDIs on issue.

Coronado now plans to conduct a retail entitlement offer, which will open on 11 May.

When Coronado reported its plans to perform an equity offer, The Motley Fool Australia reported this was due to its operations being impacted by Australia's shift to renewable energy and China's ban on Australian coal exports.

The equity offer is just one part of the company's proposed US$550 million refinancing package.

Commentary from management

Coronado managing director and CEO Gerry Spindler commented on the institutional entitlement offer, saying:

The institutional entitlement offer was well received and with the broader refinancing package, including US$350 million of senior secured notes and the asset-based-loan (in an initial aggregate principal amount of US$100 million), we have created a capital structure that has increased our financial flexibility, extended our debt maturity profile and diversified our funding sources.

Coronado Global Resources share price snapshot

Unfortunately for shareholders, the poor reaction to today's news by Coronado shares represents just their latest dip.

Currently, the Coronado share price is down 55% year to date. It's also down 51% over the last 12 months.

The company has a market capitalisation of around $823 million, with approximately 1.5 billion shares outstanding.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Resources Shares

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Why did the Fortescue share price fall 7% in October?

Let's review what happened with the ASX 200 mining giant in October.

Read more »

a mine worker holds his phone in one hand and a tablet in the other as he stands in front of heavy machinery at a mine site.
Resources Shares

Why did the BHP share price get hammered in October?

ASX 200 investors sent BHP shares sharply lower in October. But why?

Read more »

A man in his 30s holds his laptop and operates it with his other hand as he has a look of pleasant surprise on his face as though he is learning something new or finding hidden value in something on the screen.
Resources Shares

Gina Rinehart's empire raked in another $5.6 billion. Here's how

Resources and mining continue to dominate the Australian market.

Read more »

two men in business suits sit across from each other at a table with a chess board on it. Both hold their hands to their chins and look down in serious contemplation of their next move.
Resources Shares

'Not ruled out': Could BHP still buy Anglo-American?

This mega-deal might not be as dead as it looks.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

Mineral Resources share price rockets 16% on $1.1 billion news!

ASX 200 investors appear thrilled with Mineral Resources' latest news.

Read more »

Miner looking at a tablet.
Resources Shares

Here are the latest share price forecasts for Fortescue

Let’s unearth what analysts think could happen with this iron ore miner.

Read more »

A businesswoman ponders why her boat is sinking in the ocean.
Resources Shares

Lake Resources share price sinks on quarterly cash flow news

Let's take a look at the highlights of the company's Q3 update.

Read more »

A company manager presents the ASX company earnings report to shareholders at an AGM.
Resources Shares

Why today is a big day for BHP shares

Guess why everyone’s talking about BHP shares today.

Read more »