Listed Green Bond Preparations Progressing Well
Perth, Feb 9, 2021 AEST (ABN Newswire) - Altech Chemicals Limited (
ASX:ATC) (A3Y:FRA) is pleased to advise that preparations for its proposed listed green bond offering of ~US$144 million, to provide additional financing for its Malaysian high purity alumina (HPA) project are on track and progressing well.
Highlights
- Listed green bond targeting an offer of ~US$144m
- Preparation progressing well and on track
- HPA project 49% less carbon footprint than conventional HPA
Altech is working closely with London based structuring agent, Bedford Row Capital PLC (Bedford Row) and Bluemount Capital (WA) Pty Ltd (Bluemount) to prepare for a Bond offering. Preparations for the offering commenced in December 2020, and have now progressed to a point where due diligence is complete - including an environmental social governance (ESG) audit; a draft facility agreement is distributed; and a preliminary offering document is being reviewed. Altech is aiming to raise US$144m from the proposed bond issue, of which US$100m will be used as secondary debt for its Johor HPA plant (with US$44m to service bond interest during the HPA plant construction phase - see Figure 1*). Senior project finance of US$190m is already committed from German government owned KfW IPEX-Bank.
The bond issue process consists of the initial preparation phase (currently underway), where legal documentation, structures, teasers, draft investment memorandum, and comprehensive corporate presentation packs are developed and then distributed to prospective subscribers. This is followed by the opening of a data room for a bookbuild phase, which will only initiate upon positive "soft soundings" during the preparation phase, and will optimally be conducted in a period of positive overall market sentiment.
The final phase of the bond issue is execution, when commitments are settled and bond proceeds formally deposited with the SPV Co. (closing). Application for listing the bonds on the Frankfurt Stock Exchange would be made following the closing. Preparation work is progressing well and on schedule.
Background
Increasingly green bonds are being used to finance new and existing projects which deliver environmental benefits and a more sustainable economy. As announced on 20 May 2020, Altech's HPA project has been formally assessed as "green" by the independent Centre of International Climate and Environmental Research (CICERO) based in Oslo, Norway. Compared to conventional HPA processing, Altech's disruptive HPA production technology is estimated to deliver a ~49% reduction in the comparable carbon footprint, and use ~41% less energy. Also, the primary end-use for Altech's HPA is targeted for climate change products, such as LEDs lights and lithium-ion batteries.
As illustrated in Figure 1 below*, a Special Purpose Vehicle (SPV Co.) would be incorporated and managed by Bedford Row Capital (or its nominee) as the proposed bond Issuer. From a US$144m issue, US$44m would be retained by the SPV to service bond coupon (interest) payments during the period of Altech's HPA plant's construction and commissioning. The US$100m balance of proceeds is lent by the SPV Co. to Altech's Malaysian subsidiary (Altech Chemicals Sdn. Bhd.) to part-fund plant construction costs and/or for working capital. It is envisaged that the bond will be for an initial 5-year term, and typical of this type of funding would likely be re-financed at a lower coupon (interest rate) towards the end of the term. The SPV Co. would take second lien security behind senior lender KfW IPEX-Bank.
About Altech Batteries Ltd
Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.
The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.
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