09/03/2020 - 12:30

Altura announces $305m loan restructure

09/03/2020 - 12:30

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Lithium producer Altura Mining has received a three-year extension on its existing $244 million loan facility, but at a price of adding 5 per cent to the total loan amount and issuing additional shares to the lenders.

Altura announces $305m loan restructure
Altura produces lithium from its Pilgangoora mine in Western Australia. Photo: Altura Mining

Lithium producer Altura Mining has received a three-year extension on its existing $244 million loan facility, but at a price of adding 5 per cent to the total loan amount and issuing additional shares to the lenders.

At the same time, Altura has secured a further $50 million in standby equity funding and announced an $11.2 million capital raising.

The maturity of Altura's existing $US161 million ($A244 million) loan with Magy LLC has been extended out to August 2023.

Magy LLC is an investment entity of private funds managed by Castlelake, L.P., Carval, Nomura and Clearwater Capital.

The lenders have agreed to defer interest payments due next month to February 2021, as well as waiving certain loan covenants.

In return, Altura has agreed to pay an amendment fee of 5 per cent of the total loan amount, including any capitalised interest, as at the February 2020 interest payment date.

The company will also pay a waiver fee of $US1.6 million ($A2.5 million).

In addition, Altura will issue 9.9 per cent of its shares to the lenders.

The final part of the financing package is a further $50 million commitment by investment group LDA Capital, also based in the US, over a 36-month term.

As part of the agreement, Altura will issue 74.4 million unlisted options to LDA with a three-year term exercisable at 150 per cent of the 30-day volume weighted average price and pay a 2 per cent commitment fee ($1 million).

Norway-based Clarksons Platou Securities acted as financial advisor for the agreement.

Altura managing director James Brown said the restructured package would support the company in the current market and in upcoming years.

“The combined sum of the financing package gives us considerable balance sheet strength and working capital headroom so we can continue to push through this period of market weakness,” Mr Brown said.

“As has been the case since we commenced production, our strong position in the lithium market continues to be supported by our impressive operating performance and sought-after high-quality lithium products.”

Altura first produced lithium concentrate at its flagship Pilgangoora mine in Western Australia in July 2018, 16 months after commencing drilling.

At full production, Altura said the processing plant would produce 220,000 tonnes per annum of 6 per cent lithium concentrate that would feed into the electric vehicle and lithium battery markets.

The company completed a definitive feasibility study earlier that year, revealing an opportunity to expand production to 440,000tpa of lithium, with an internal rate of return of 63 per cent a 2.3-year payback.

The lithium concentrate is trucked to Port Hedland, about 123 kilometres from the mine, and exported to Altura’s offtake partners in China for further processing.

In addition to the loan extension, Altura will issue 224 million shares at 5 cents per share to raise $11.2 million, with Altura director Allan Buckler having committed $5 million to the placement.

Clarksons is also acting as originator and advisor to the placement.

Altura shares were down 30.16 per cent at 2:45pm AEDT to trade at 44 cents, with the S&P/ASX200 down 387 points, or 6.6 per cent, to 5,829 at 3:10 AEDT.

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