Altech - US$100,000 Share Subscription Completed
- Initial subscription of US$100,000 of Altech shares by SMS group
- Demonstrates support and confidence for Altech's HPA project
- Project equity or subordinated debt support at project financial close
SMS is a large privately owned German engineering company with an annual turnover of approximately 3.3 billion Euros. SMS builds turnkey solutions based on innovative plant technology, complete with buildings, infrastructure and auxiliary equipment for processing plants such as Altech's proposed HPA plant. SMS was founded in 1871 and is based in Dusseldorf, Germany with office locations worldwide. SMS has recent EPC contract experience in Malaysia, having successfully completed the Sakura smelting project, in Sarawak.
This initial share subscription by SMS, is in the opinion of the Company, a sound endorsement of its HPA project, especially given SMS's prior experience with the kaolin-HPA hydrogen chloride processing technique that Altech will use in its proposed Malaysian HPA plant.
For the share subscription, Altech has issued 1,162,979 fully paid ordinary shares to SMS at $0.11 per share, the same price paid by shareholders that participated in the Company's recently completed share purchase plan.
Commenting on the share subscription by SMS, Altech managing director Iggy Tan said, "This initial upfront investment in Altech is a very real demonstration of SMS's confidence in the process, project and the Company. It is not common for an EPC contractor to be demonstrating this type of upfront support. In addition, SMS's commitment for additional equity or subordinated debt support at project financial close is also an outstanding indication of its support and confidence of this project. SMS have prior experience with the Company's proposed kaolin to HPA hydrogen chloride acid leaching process, and SMS are amongst the top three users of German government export credit (ECA) facility."
About Altech Chemicals Ltd
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 Ltd