Altech Chemicals has inked a non-binding deal for $US60 million ($80.4 million) in new financing to build its high purity alumina (HPA) plant in Malaysia.
The “stream finance facility” is being provided by a US-based global investment firm with $US4.5 billion under management, the company (ASX:ATC) told investors this morning. A stream finance facility provides a cash advance in exchange for a percentage of future gross sales.
Altech’s share price advanced 6.1 per cent to 17.5c on Friday morning on the back of the news. Earlier this year Altech agreed on a $US190 million loan from German government-owned KfW IPEX-Bank to build the HPA plant in Johor, Malaysia — but the release of the funds depends on securing the rest of the costs.
Altech is also considering a $US90 million mezzanine loan from a global investment bank. The company told investors the new US$60 million stream finance facility will need to be “acceptable” to KfW IPEX-Bank and any mezzanine debt provider.
https://unauthorised investment advice/wp-content/uploads/2018/06/ATC-shares-1.jpg
Misunderstood market
HPA is not a widely understood commodity and there are currently only about four ASX-listed players. HPA is a high-value material needed for lithium ion battery components and synthetic sapphire used in LED lights, semiconductor wafers and scratch-resistant smartphone glass.
It is currently a small global market of about 25,000 tonnes annually. But that is tipped to grow to around 48,000 tonnes by 2025 and 86,000 tonnes by 2030.
Altech is the most advanced player after earlier this month received the manufacturing licence it needs for its 4500-tonne-per-annum HPA plant.
