Ann: Kathleen Valley Funding Package, page-272

By Rhiannon Hoyle Liontown Resources hasn't had any talks with Albemarle since the U.S. lithium giant abandoned a proposed takeover earlier this week, nor with new top shareholder Gina Rinehart--Australia's richest person--about its future, Chief Executive Tony Ottaviano said in an interview after lining up funding to finish its Australian lithium project. Earlier this week, U.S. chemicals company Albemarle scrapped a proposed $4.16 billion takeover of Liontown, citing the difficulty of completing a deal after Australia's richest person bought a large stake in the company. Australian billionaire Rinehart's Hancock Prospecting said on Oct. 11 that it had acquired a 19.9% stake in Liontown and wants to have a prominent influence over the company's future. "There's been no dialogue" with Albemarle since Sunday, Ottaviano told The Wall Street Journal. "They have mentioned to me in writing that they want to always keep the door open for potential discussions around offtake or other things, so I think it will just go back to just the standard commercial engagement." Liontown has held talks with Rinehart's Hancock Prospecting in recent days about the equity raising, but hasn't discussed its intentions as a new major shareholder, Ottaviano said. He said Liontown hasn't received any approaches from other interested parties. "And if we did have an approach and it was significant, we'd be compelled to disclose," he said. Ottaviano said he understood Albemarle's decision to walk away "given what had manifested in the market." "Once we knew late Sunday night from Albemarle that they were withdrawing, we then decided that because we were so close with concluding the financing, that we'd go" on the funding package, he said. Liontown announced the more-than 1 billion Australian dollar (US$633.8 million) debt-and-equity package on Thursday. It said it secured A$760 million in binding debt commitments and will raise about A$376 million in equity to fund the Kathleen Valley lithium operation it is building in the Australian Outback. Proceeds will also be used to refinance existing debt. A non-underwritten share-purchase plan could raise up to a further A$45 million. Liontown, which has agreed to supply lithium to buyers including Ford Motor and Tesla after it starts producing lithium-rich spodumene concentrate next year, earlier said the funding deal provides "prudent liquidity through to first pars due to cost-inflation pressures and changes to the project's design, including an increase to initial plant capacity. The cost of the project has doubled over the past two years due to cost-inflation pressures and changes to the project's design, including an increase to initial plant capacity. The lending syndicate includes Australia's four biggest banks--Commonwealth Bank, Westpac, NAB and ANZ--as well as HSBC and Société Générale. Liontown has received a commitment from Export Finance Australia for an export credit agency facility, and the Export-Import Bank of the United States could provide support at a later date, Ottaviano said. Liontown had been lining up the package over a number of months and continued to progress negotiations in parallel with Albemarle's due diligence in recent weeks, he said "This was plan A," he said. "It's proven to be a very wise decision."

Write to Rhiannon Hoyle at [email protected] (END)
Dow Jones NewswiresOctober 19, 2023 05:54 ET (09:54 GMT)
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