Based on the information the company has released, there is no connection between the $ value of the 800Ktpa and the $150m. Yes, the prepayment is a liability (it's basically a loan with interest but deliverable in future coal tonnes) that will be drawn down between now and Dec 2025 and paid back starting in 2027 by delivering coal for yes - no cash, but a loan being reduced. No slight of hand there.
CRN needs cash now for the next 18 months. In 2027 when the rebate is gone, CRN will be in a much better position to pay back the loan.
If that poster has proof that the contract terms have some limit on the net price fine but I suspect they are not even saying that - just getting hung up on the cash available to CRN from the deal in 2025 vs the amount received for the coal in future and used to reduce the loan.
This is a pretty good deal because the price will be a lot closer to market prices than the previous deal and cash is the most important thing now.
The only minor thing I don't like is the side note "Each month’s rebate recoupment and deferral are subject to Coronado meeting its financial covenants under the new ABL and maintaining a cash balance of between US$50 million and US$100 million between now and December 2025.". However, that should not be an issue now with the ABL in place I think - over that time period at least.
CRN Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
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