Coronado Posts $109.5M Q3 Loss, Proposes $265M Credit Facility with Stanwell

Financial Performance Amid Market Challenges

Coronado Global Resources Inc. (ASX – CRN) has released its Form 10-Q for the quarter ended September 30, 2025, revealing continued financial strain driven by weak metallurgical coal markets. The company reported a net loss of $109.5 million for the third quarter and a cumulative loss of $281.9 million for the first nine months of the year. These losses reflect a significant decline in coal revenues, primarily due to lower average realised prices and reduced sales volumes.

Despite these headwinds, Coronado’s operational performance showed signs of resilience. Saleable coal production increased by 0.7 million metric tons compared to the same quarter last year, supported by higher equipment utilisation and the ramp-up of the Mammoth underground mine in Australia. However, sales volumes were constrained by logistical challenges including rail, port, and co-shipping delays, which deferred shipments into October 2025.

Liquidity Pressures and Credit Rating Downgrades

Liquidity remains a critical concern for Coronado. As of September 30, 2025, the company held $171.8 million in cash and cash equivalents (excluding restricted cash) and had $15.5 million available under its $150 million asset-based revolving credit facility (ABL Facility). Net debt stood at $328 million, reflecting the company’s significant leverage.

Credit rating agencies have taken note of the company’s financial challenges. In mid-2025, S&P downgraded Coronado’s credit rating from ‘B-’ to ‘CCC+’ and Moody’s followed with a downgrade from ‘Caa1’ to ‘Caa2’. These downgrades triggered review events under the ABL Facility, but Coronado successfully negotiated waivers with lenders to maintain access to credit. The company also secured a waiver for financial covenant compliance as of September 30, 2025, resetting downgrade thresholds to avoid immediate default risks.

Proposed Transaction with Stanwell Corporation

In a strategic move to bolster its financial footing, Coronado announced a non-binding proposed transaction with Stanwell Corporation Ltd. The deal aims to refinance the existing ABL Facility, increasing its availability from $150 million to $265 million with a longer five-year maturity and lower interest rates. Stanwell will also waive remaining rebate payments under the Amended Coal Supply Agreement (ACSA) and extend the New Coal Supply Agreement (NCSA) from 2037 to 2043, allowing for greater annual coal nominations.

Additionally, Stanwell will provide prepayments linked to future contract tonnages, which will bear interest and be repaid through coal deliveries when Coronado’s liquidity exceeds $300 million. The arrangement includes security interests over Coronado’s working capital and fixed assets, and provisions that require Stanwell’s consent for significant changes in company control.

Outlook and Risks

While management believes the Stanwell transaction could improve liquidity and financial stability, the majority of funding will be delivered over time rather than upfront. The company continues to pursue cost control, potential asset sales, and other funding initiatives. However, substantial doubt remains about Coronado’s ability to continue as a going concern within the next year, given ongoing market volatility, production uncertainties, and regulatory obligations including potential increased surety requirements under Australia’s Financial Provisioning Scheme.

Coronado’s coal markets remain subdued, with metallurgical coal prices pressured by oversupply and weak steel demand, particularly in China and other key markets. Operational improvements have yet to translate into improved profitability, and logistical constraints continue to impact sales volumes. Investors will be watching closely how the company navigates these challenges and whether the Stanwell deal can be successfully completed and deliver the intended benefits.