Australian innovator Altech Chemicals Ltd. announced yesterday that the firm has landed a non-binding term sheet with a United States investment group for a US$60 million stream finance facility supporting its high-purity alumina (HPA) project.
Per Altech, the unnamed financier has agreed to advance Altech the US$60 million facility up front for a percentage of the project’s sales once production commences. Altech anticipates using the advance for development, construction, and working-capital requirements.
The facility, which is structured to dovetail with Altech’s 10-year offtake sales agreement with Mitsubishi Australia, will be paid off over the life of the project. Though the deal is approved by both parties in principle, Altech reminds the market that the deal is subject to certain due diligence requirements, settling other binding terms, and approvals from other banks involved in the project. In addition, the deal still requires a sign-off by senior debt provider KfW IPEX-Bank and other mezzanine debt providers.
Other than the information given above, the remainder of the deal’s terms, including the financier, remains confidential.
Altech’s managing director Iggy Tan expressed the company’s gratitude and optimism in the wake of the financing deal.
“The Company is extremely pleased with the interest that is being shown from a variety of financiers in our HPA project, as is demonstrated by the term sheets received to date. We remain committed to pursuing an optimal financing structure for the Project, and will continue to keep shareholders informed of developments.”
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.