Executes Commitment and Final Terms for US$190m Loan
Executes Commitment and Final Terms for US$190m Loan
Perth, Feb 2, 2018 AEST (ABN Newswire) - Altech Chemicals Limited (Altech/the Company) (ASX:ATC) (FRA:A3Y) is pleased to announce that it has executed commitment together with agreed terms and conditions from German government-owned KfW IPEX-Bank formalising the total debt package of US$190 million for its proposed Malaysian high purity alumina (HPA) project.


- Commitment and terms documentation executed with KfW IPEX-Bank

- Total debt package US$190 million

- Export credit cover US$170 million

- Long tenure and at attractive terms

US$170 million of the project finance package is covered by the German export credit agency (ECA) with the balance of US$20 million at normal commercial terms. The specific details of the KfW IPEX-Bank loan package including the ECA covered facility are confidential, however as previously announced the ECA covered loan (US$170 million) is at long tenure and highly attractive terms. The balance of US$20 million of borrowing will be a 7-year loan including a 2-year construction period, resulting in a 5-year repayment period and at customary lending terms. By comparison to typical project finance, the project finance agreed with KfW IPEX-Bank is extremely attractive. The final step to finance close is the execution of the facility agreement documentation and the satisfaction of various conditions precedent required before first debt draw-down.

Project Equity Funding

The Company has commenced the project equity funding process, which is a condition precedent to debt draw-down. The final required equity component of project funding will be determined as the Company works though the balance of funding options and financing costs. The final funding mix may include subordinated mezzanine finance and/or project level equity participation. Since the KfW IPEX-Bank debt funding was confirmed in late 2017, there is heightened interest in the Company and its HPA project and a number of project funding options have been presented. The Company is also exploring potential project-level joint venture options with several major industrial groups that could result in a major reduction of the equity amount required to fund the project and subordinated mezzanine finance with associated equity.

The objective is to achieve a robust project funding solution that maximises shareholder returns and minimises dilution.

About Altech Chemicals Ltd

Altech Chemical Ltd ASX:ATCAltech 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.



Iggy Tan
Managing Director
Altech Chemicals Limited
Tel: +61-8-6168-1555
Email: info@altechchemicals.com

Shane Volk
Company Secretary
Altech Chemicals Limited
Tel: +61-8-6168-1555
Email: info@altechchemicals.com

Investor Relations (Europe)
Kai Hoffmann
Soar Financial Partners
Tel: +49-69-175-548320
Email: hoffmann@soarfinancial.com

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