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DoctorFouad

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28/07/20

22:58

Post #: 46136984
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Originally posted by alphabette: ↑

Altech confronted Macbank with this issue back in March this year. It seems they want end-user product pricing transperancy prior to commitment. (Bold highlights are mine)

ALTECH – MEZZANINE DEBT UPDATE

• Update meeting in London with Macquarie Bank
• Re-affirmed interest for a US$90 million mezzanine facility
• Positive response from bourgeoning European lithium-ion battery sector to Altech HPA project
• Posting of alternate director to Germany delivering results

Altech Chemicals Limited (Altech/the Company) (ASX: ATC) (FRA: A3Y) is pleased to provide an update on the progress on its proposed US$90 million mezzanine loan facility.

Altech continues to work with its preferred mezzanine lender Macquarie Bank (Macquarie) to secure a US$90 million mezzanine loan facility. An update meeting was recently held with Macquarie in London, where when pressed by Altech the Macquarie team reaffirmed its continued interest in providing the facility – especially given the recent increased profile of planned lithium-ion battery plant construction in Europe, and a stated industry preference for securing long-term battery materials supply.

Finalising a facility remains subject to Macquarie satisfying all of its due diligence, various internal approvals and inter-creditor arrangements with senior lender KfW IPEX-Bank. Macquarie has progressed discussions with the bank and its legal counsel (Freshfields), regarding access to the previous legal due diligence work and updates to this work.

Whilst Altech has a ten-year offtake sales arrangement with Mitsubishi Corporation’s Australian subsidiary, Mitsubishi Australia Ltd (Mitsubishi), Macquarie stressed to Altech the importance of it selling a proportion of its planned HPA production to an end user at fixed product prices to demonstrate some pricing transparency in an otherwise opaque market.

The recent posting of Altech alternate director Mr Uwe Ahrens to Germany (refer ASX Announcement 27 February 2020) is already starting to deliver increased engagement with emerging participants in the bourgeoning European lithium-ion battery sector. Response to the promotion of Altech’s HPA project and its 99.99% (4N) HPA product has been positive. The Company’s objective is to link with one or more HPA endusers that appreciate the advantage of a current commitment to accept future volumes of its 4N HPA product at pre-agreed or other transparent pricing, and/or to directly partner with Altech for the development of its HPA project.

https://www.altechchemicals.com/sites/altechchemicals.com/files/asx-announcements/6970731.pdf

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That was my intuition : a gentlemen agreement : if you reject the approval of the loan (which practically they did because of the uncertainty of the demand/pricing of hpa) never tell us that explicitly (so not to shock / break the hearts of our shareholders) until we find a new financing solution or maybe we could ONE DAY satisfy your requirements (a binding take or pay off-take agreement).

the question though remains if the demand is there and prices of hpa are increasing then why atc is unable/struggling to sign a binding take or pay offtake agreement ? Why end users refuse that ? If end users believe that prices will increase in the near future and that the supply will tighten then you would assume that its in their best interest to secure a binding offtake agreement with atc.

could someone with contacts with iggy asks him directly this question please ? Thanks for any help.

Last edited by DoctorFouad: 28/07/20

ATC Price at posting: 4.1¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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