Altech green lights USD$100m German equity strategy
Altech Chemicals is proceeding with its German equity strategy to sell up to a 49% stake in its high purity alumina, or “HPA”, project for USD$100 million to Frankfurt Stock Exchange-listed company, Youbisheng Green Paper.
As part of the strategy, Altech will also acquire a 29% stake in Youbisheng, which will be renamed Altech Advanced Materials, for an initial €500,000 in cash and €1 million in Altech shares to the vendor.
A further cash consideration of €1.23 million is payable by Altech in March next year to complete the deal.
In return, Altech Advanced Materials will be required to pay a €500,000 fee to Altech to secure its right to earn up to a 49% stake in the HPA project.
This right grants the German company an option to acquire a minimum of 10% in Altech’s HPA project for USD$20.4m and a maximum of a 49% interest for USD$100 million by subscribing for shares in Altech’s wholly-owned subsidiary, Altech Chemicals Australia.
Altech Advanced Materials will now seek to raise up to €70 million in new equity to fund the acquisition of its stake in the HPA project.
Altech Managing Director Iggy Tan said that the company is continuing to pursue other joint venture partner initiatives that are also underway and/or the USD$90 million mezzanine debt work that is progressing with Macquarie Bank.
Following the end of year six after project financial close, Altech has the right to buy back the remaining stake in the HPA project for a valuation that would secure a 15% per annum return for its German partner.
Altech’s Meckering deposit has a JORC ore reserve of 1.2 million tonnes grading 30% alumina, which is sufficient to support a mine life of at least 30 years at the expected throughput rate of about 40,000 tonnes per annum.
There is potential for further growth too given that the deposit has a JORC resource of 12.7Mt @ 29.5% alumina.
Stage 1 construction of the company’s HPA plant at the Tanjung Industrial complex in Johor, Malaysia, is also progressing well.
The plant will produce up to 4,500 tonnes of HPA from exceptionally pure kaolin clays sourced from Meckering.
HPA is used in high tech applications such as LED lighting, advanced mobile phones and as a separator in lithium-ion batteries to improve both safety and performance.
Altech Chemicals (ATC)
Closing price for the last 90 trading days
Powered by Morningstar ®