To Commence Listed Green Bond Offering Process
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.
The execution program commences with a 3 month preparation phase, where legal documentation, structures, teasers, draft investment memorandum and comprehensive corporate presentation packs will be 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 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.
The Company is now proceeding to the preparation phase of the execution program which is expected to run until Q2 2021 (due to the Christmas / New Year period).
*To view tables and figures, please visit:
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 (Al2O3) through the construction and operation of a 4,500tpa high purity alumina (HPA) processing plant at Johor, Malaysia. Feedstock for the plant will be sourced from the Company's 100%-owned kaolin deposit at Meckering, Western Australia and shipped to Malaysia.
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. Increasingly HPA is used by lithium-ion battery manufacturers as the coating on the battery's separator, which improves performance, longevity and safety of the battery. With global HPA demand approximately 19,000t (2018), it is estimated that this demand will grow at a compound annual growth rate (CAGR) of 30% (2018-2028); by 2028 HPA market demand will be approximately 272,000t, driven by the increasing adoption of LEDs worldwide as well as the demand for HPA by lithium-ion battery manufacturers to serve the surging electric vehicle market.
Altech Chemicals Ltd