Altech Batteries is seeking to clean up its corporate structure by offering to buy the remaining minority stakes in the company’s CERENERGY and Silumina Anodes projects, currently owned by its German-listed subsidiary, Altech Advanced Materials.
The $23.3 million all-scrip deal includes an 18.75 per cent additional stake in the CERENERGY project and a 25 per cent increase in Silumina Anodes.
It is designed to streamline the company’s corporate structure and give Altech greater control over its cutting-edge salt battery technology.
When the deal is completed, Altech will own 75 per cent of CERENERGY and take full control of the Silumina Anodes project. Germany’s Fraunhofer Institute will remain a 25 per cent joint venture partner in CERENERGY, locking in an ongoing research partnership.
In exchange for the minority stakes, Altech will issue 532 million new fully paid ordinary shares to Altech Advanced Materials at a deemed price of 4.4 cents a share, leaving the German subsidiary with a 21 per cent stake in Altech post-acquisition.
As part of streamlining Altech’s corporate structure, shareholder loan obligations will be cancelled to clean up the balance sheet. This should also accelerate its project financing process.
Altech’s independent directors have unanimously endorsed the acquisition, pointing at its potential to deliver long-term shareholder value. The company says the deal, which is subject to shareholder approval and regulatory clearances, is expected to be nailed down by the middle of the year.
Altech’s CERENERGY project has designed a solid-state battery that uses simple table salt and appears to provide a safer and more sustainable alternative to lithium-ion technology.
Using sodium chloride means the manufacturing processes dodge a supply chain dependent on lithium, cobalt and graphite, making it an excellent candidate as a scalable grid storage solution.
The battery has been tested for a 15-year lifespan and can cope with extreme temperature changes.
Altech’s Silumina Anodes project, meanwhile, has developed an alternative battery anode technology using high-purity alumina with silicon to significantly improve lithium-ion battery performance through a higher energy storage capacity and an improved lifespan.
The company says its Silumina knowhow could play a critical role in the future European electric vehicle market as car manufacturers look for upgraded performance.
The $23.3m price tag represents a significant 24 per cent return on an initial investment by Altech Advanced Materials’ German shareholders, who doled out $18.8m.
Now that Altech is set to control 75 per cent of CERENERGY and all of Silumina Anodes, the company has re-run the risk-adjusted numbers. Applying a 23 per cent discount for financing risk to net asset valuations, it estimates the two projects now have a combined value of $77m.
Altech says this estimate should hold it in good stead as it searches for strategic funding and development partners.
By consolidating ownership, Altech will gain greater control over operational decisions, simplify its governance structures and improve its chances of signing off on a financing deal.
A streamlined corporate structure and a strong pipeline of advanced battery technologies means Altech appears well-placed to capitalise on the growing demand for high-performance and sustainable energy solutions.
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By James Pearson
