Receives First Mezzanine Debt Term Sheet
Receives First Mezzanine Debt Term Sheet
Perth, May 11, 2018 AEST (ABN Newswire) - Altech Chemicals Limited (Altech/the Company) (ASX:ATC) (FRA:A3Y) is pleased to announce that it has received an indicative mezzanine debt term sheet for up to US$ 120 million from an international investment bank, for its proposed Malaysian high purity alumina (HPA) plant and associated kaolin mine in Meckering, Western Australia (the Project).


- US$120 million indicative mezzanine debt term sheet received

- Follows extensive preliminary project due diligence

- Global investment banking group

On 2 February 2018 the Company announced that it had executed commitment and final terms for a US$ 190 million senior debt package with German government-owned KfW IPEX-Bank. Since then, the Company has been working with a number of advisors to secure the balance of funds for the Project, which is one of the conditions precedent to draw-down on the senior debt. One of the work streams being pursued by the Company and its advisors is a mezzanine debt facility of up to US$ 120 million, which will be subordinate to the senior debt.

The Company has now received an indicative mezzanine debt term sheet from a global investment bank equal to US$120 million, representing a facility amount of US$ 90 million plus accrued interest during construction and plant commissioning. The investment bank has already conducted extensive preliminary due diligence on the Project, including accessing the Company's data room, which contains detailed project information and various due diligence reports commissioned by the senior lender, KfW IPEX-Bank.

The investment bank is a diversified financial services group with a global presence and more than US$ 300 billion in assets under management. As is customary with these types of transactions, the public disclosure of the bank's name and the proposed lending terms remain confidential at this point in time. The Company expects similar term sheets from other potential lenders currently in due diligence and evaluation during the course of the month.

Altech managing director Iggy Tan said, "From the outset the Company has been targeting 'vanilla' mezzanine debt from top-tier lenders. This approach does take longer and involves a higher level of scrutiny (due diligence), however securing mezzanine debt from top tier providers will be a far better outcome for the Company and shareholders. We are now starting to see some reward from this strategy and our efforts," Mr Tan concluded.

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

Shane Volk
Company Secretary
Altech Chemicals Limited
Tel: +61-8-6168-1555

Investor Relations (Europe)
Kai Hoffmann
Soar Financial Partners
Tel: +49-69-175-548320

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