Next Step - AAM Equity Raise
At its 17 July 2019 shareholder meeting, AAM shareholders approved for the company to issue up to 63,102,080 of new shares, which would raise EUR69.4 million, fully subscribed, at the minimum subscription price of EUR1.10 per share.
The process that AAM is required to follow for the issue is:
- firstly, the new shares will be offered to AAM's existing shareholders for subscription at a ratio of 1:40 (1 existing share entitles to subscribe to 40 new shares), at a subscription price of EUR1.10 per share;
- any new shares not subscribed at the end of the initial subscription period (the "oversubscription shares") may then be subscribed by those existing shareholders that have subscribed for all of the new shares to which they were entitled in accordance with their 1:40 subscription rights. The allocation of the oversubscription shares shall take place at least at the issue price of EUR1.10 per share; and
- finally, any remaining unsubscribed new shares can then be placed, at least at the issue price of EUR1.10 but aiming at a price of EUR1.20 per share or higher, to others that are currently not AAM shareholders.
AAM has commenced drafting the required prospectus for the share issue, which Altech has been advised is expected to be lodged with the German regulator (BaFin - Federal Financial Supervisory Authority) next week.
An initial round of marketing roadshows for the issue is planned for Germany in September 2019 and this will include presentations and attendance at various investor conferences such as Herbstkonferenz (Frankfurt), Zurich Capital Markets Conference (ZKK) (Zurich), Edelmetallmesse (Munich) and the German Equity Forum (Frankfurt). It is currently expected that the issue will be initiated in mid-Q4, 2019.
Since the announcement by AAM of shareholder approval for the issue of 63,102,080 new shares, AAM shares, although thinly traded on the Frankfurt stock exchange, have risen in price from EUR1.30 per share (mid-June 2019) to a high of EUR4.50 per share on 29 July 2019. This is a positive response to the proposed new issue and the opportunity to invest in Altech's HPA project with a guaranteed year-6 buy-back and agreed rate of return.
AAM is in the process of aligning its corporate branding with that of Altech in anticipation of its status as HPA project joint venture partner. The brand changes will include AAM's corporate logo and website, which are close to being launched.
Altech managing director Iggy Tan said "we are very excited with the prospect of working with AAM on its European marketing campaign and implementing our German project equity strategy. As we have previously mentioned, Altech's German equity strategy does not preclude the other joint venture partner initiatives that are also underway, nor does it replace the mezzanine debt initiative that is progressing with Macquarie Bank."
About Altech Chemicals Ltd
Altech Chemicals Limited (ASX:ATC) (FRA:A3Y) is aiming to become one of the world's leading suppliers of 99.99% (4N) high purity alumina (HPA) (Al2O3).
HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.
Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.
Altech Chemicals Limited
Altech Chemicals Limited
Investor Relations (Europe)
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