New Details Emerge of Altech’s US$190-MM Debt Package for High-Purity Alumina Project
03 February 2018 by Staff
Australian innovator Altech Chemicals Ltd. announced yesterday the closing of its US$190-million debt package with German state-owned financial institution KfW IPEX-Bank, bringing the company’s goal of commercial production of high-purity alumina closer to reality.
Though the deal was announced previously, details of the financial arrangement were not forthcoming until now. Germany’s export credit agency (ECA) is lending US$170 million, while the remaining US$20 million are financed under standard commercial terms. Though specifics of the arrangement are still confidential, the parties revealed that the ECA loan is of a long tenure and has what Altech considers to be “highly attractive” terms.
The remaining US$20 million has a seven-year term with a two-year construction period included, leaving a five-year repayment window. Financial arrangements beyond the principal amount were not disclosed, but Altech assured investors that they are “extremely attractive” compared to standard project finance terms.
Altech indicated that the package is prepared for closing but for the signing of the facility agreement and the fulfillment of various and sundry conditions precedent necessary prior to first debt draw-down. The firm also advises that it has begun the project equity funding process, which it says may include either subordinated mezzanine finance, project-level equity participation, or a combination of both.
Altech says that it has experienced “heightened interest” from some of the sector’s major players, which it hopes will significantly reduce the equity amount needed to keep the project going.
Altech Chemicals is based in Subiaco, Western Australia and is attempting to implement a marketable process for delivering 99.99% (4N) HPA using conventional equipment at a lower production cost than methods currently available. It plans to construct a 4,500 metric ton per annum HPA plant at Tanjung Langsat Industrial Complex, Johor, Malaysia that will use kaolin clay from a company-owned mine in Meckering, Western Australia. The firm is fast-tracking HPA production due to an agreement with Mitsubishi for 100% of its proposed HPA production for ten years. At present, Altech intends to commence project development later this year.