HPA Project - Debt Funding Update
Perth, Mar 22, 2016 AEST (ABN Newswire) - Altech Chemicals Limited (
ASX:ATC) is pleased to provide an update on the debt funding activities for its high purity alumina (HPA) project following a meeting with KfW IPEX-Bank in Stuttgart, Germany on 17 March 2016.
Highlights
- Altech estimates ~$US60m of debt funding for its proposed high purity alumina (HPA) project
- German government-owned KfW IPEX-Bank GmbH mandated
- Application for ~US$40m of German government export credit agency (ECA) cover
- ECA cover application within the quarter
Altech currently estimates that its proposed HPA project will support approximately US$60 million of debt. To provide structuring and financing services in relation to the provision of senior debt funding the Company has mandated German government-owned bank KfW IPEX-Bank Gmbh (KfW IPEX-Bank). Altech has been working closely with KfW IPEX-Bank since January 2016 as part of the bank's comprehensive due diligence of the Company and the project.
With KfW IPEX-Bank's support, the Company intends to make formal application under the export credit insurance guarantee scheme of the Federal Republic of Germany in relation to approximately US$40 million of project debt. The application will be lodged within the quarter and will be prepared by KfW IPEX-Bank for submission to Euler Hermes, the company mandated to administer the scheme. The US$40 million application amount is based on the Company's estimate of the project capital expenditure that qualifies for ECA cover under the scheme's prevailing rules. Interest rates charged by lenders on debt that is supported by ECA cover is typically at attractive conditions as the repayment of the debt is insured; also long tenure is usually available in accordance with OECD guidelines. Additional debt of ~US$20 million is estimated at prevailing commercial terms and rates of interest. KfW IPEX-Bank has commenced independent debt and project loan modelling, which will be included in the ECA cover application.
In addition to the independent financial modelling by KfW IPEX-Bank, an independent technical review of the project is also required. KfW IPEX-Bank has shortlisted a number of international engineering firms to provide proposals for this requirement, which will consist of detailed analyses of the project bankable feasibility study, including geology, process test work, pilot plant work and will include site visits to both Meckering and Malaysia.
Altech managing director Mr Iggy Tan said that the Company was delighted with the progress of the bank's due diligence. "We have a great banking partner in KfW IPEX-Bank; all things going well, we expect to advance to debt term sheets towards the back-end of this year. In parallel to completing debt financing, we will be working with M+W Group to finalise the detailed engineering design, complete permitting for both sites and secure off-take arrangements for the HPA plant's production - all of which will be requirements for debt draw-down. We expect that the results of all these corresponding developments to come together in Q-4 this year".
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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