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.