One Big IPO Being Discussed - Coronado Coal

  • Sep 25, 2018 AEST
  • Team Kalkine
One Big IPO Being Discussed - Coronado Coal

US based company, Coronado Global Resources Inc is coming up with an initial public offer or IPO and this is expected to be one of the largest IPOs after mining boom in Australia in a span of 6 years. The IPO is coming at a time when the coal markets are witnessing the negative impacts. Whether or not the weakness in the coal markets could impact the IPO would be the key to look out for. The steelmaking coal price have been witnessing downward trend on the back of heightened tensions between the US as well as China. As far as outlook for the prices are concerned, department of Industry, Innovation and Science expects that prices have weaker outlook. According to the department, the prices are expected to continue falling which could further impact the coal markets. Amidst this, Coronado would be hitting the ASX under the symbol “CRN.”

The valuation has been conducted on Coronado and it stood in the range of $3.8 billion-$4.4 billion. The price range (on a per share basis) for the company’s IPO is indicated to be in the range of $4-$4.80. The company’s coal mines have been situated in the United States as well as in Queensland. The company came to lime light when the payment was made in order to purchase Wesfarmers’ Curragh mine. Wood Mackenzie is of the view that the price is expected to be $US 176 a tonne and this estimate has helped the company in projecting its next year financial year’s earnings before interest, tax, depreciation and amortization or EBITDA amounting to $US 737 million. In 2018, the company is expected to post EBITDA amounting to $US 578 million. 

The primary reasons for the IPO are the following:

  • People could invest in the shares as they would be listed on the Australian Securities Exchange
  • Raised funds would help in debt extinguishment
  • Boost the momentum to achieve long term growth
  • Would help Energy and Minerals Group in the realization, which is the US private equity firm backing the IPO

According to Coronado’s Chief Executive Gerry Spindler, the demand is expected to witness a favorable momentum on the back of China, the US as well as Europe. He expects tighter supply picture. The Energy and Minerals Group plans to unload 30% share with respect to Coronado. According to Spindler, this group plans to be major shareholder. The group is optimistic about the outlook for Coronado. After JSW Steel in 2011 and Yancoal in 2012, its time to look out for the next biggest IPO. Coronado’s top management stated that it focuses primarily on the distribution parameter. According to them, the company plans to distribute 60-100% of its FCF or free cash flow. In this regard, the company has projected the FCF of $US 297 million for the current year. In FY2019, the company expects this to reach at $US347 million.

Gerry Spindler has plans to undertake expansion activities at the mine that the company has purchased from Wesfarmers’.

Dividend Stocks To Buy

The Income available from dividends remains attractive for many investors.

We take a look at the best yields on the market and assess what they say about a company’s prospect.

One Thing is certain, though, Australia interest rates are still low, making income difficult to come by and keeping the focus for many investors on high yielding stocks. Kalkine’s team of analysts bought you handpicked report for “Top 25 Dividend Stocks For 2018.”

ASX-relevant Special Reports are published year-round to provide a detailed analysis into an investing opportunity or a potential risk to your portfolio.

Click here to get your free report.


Disclaimer

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkinemedia.com and associated websites are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.

 

All pictures are copyright to their respective owner(s).Kalkinemedia.com does not claim ownership of any of the pictures displayed on this website unless stated otherwise. Some of the images used on this website are taken from the web and are believed to be in public domain. We have used reasonable efforts to accredit the source (public domain/CC0 status) to where it was found and indicated it below the image.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.

As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.

CLICK HERE FOR YOUR FREE REPORT!
   
x
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it. OK