Germans dig deep for Altech

GERMAN investor Wilhelm Zours is set to emerge with around 13.6% of Altech Chemicals after he agreed to fund the majority of the junior’s latest capital raising to support the commencement of stage two engineering and construction at the company’s high purity alumina plant in Malaysia.
Germans dig deep for Altech Germans dig deep for Altech Germans dig deep for Altech Germans dig deep for Altech Germans dig deep for Altech

Melewar's Uwe Ahrens and Altech's Iggy Tan at the start of construction.

Haydn Black

Reporter

Zours is the majority shareholder of Deutsche Balaton and Delphi Unternehmensberatung, which will put in a combined A$10.85 million of an $18 million placement
 
Existing shareholders SMS Investments and Melewar Group have also each agreed to put in $2 million each. Melewar requires shareholder approval, while SMS is still pledging to pump in a further $13 million at project financial close.
 
Other professional and sophisticated investors made up the balance, which was priced at 10.85c, a 16.5% discount to the last traded price.
 
A separate share purchase plan to other shareholders on the same terms will not be issued, breaking Altech's traditional practice, because ASX rules limit SPPs to one per year, and the company used its shot facility when it raised $20 million last July at 16.5c.
 
Altech signed an agreement with Macquarie Bank for around US$90 million mezzanine finance in February, and it is now advancing other due diligence with German government-owned KfW IPEX-Bank for a $190 million senior debt package. Other financing approaches are also ongoing.
 
While it hasn't yet taken the final investment decision on the $340 million project yet, construction works are being undertaken in parallel to keep the project advancing at a brisk pace.
 
Stage one construction was said to be advancing well, with the site cleared and foundation piling underway, with a number of buildings being fabricated. 
 
The majority of the cost of stage one construction will be credited against the US$280 million lump-sum fixed-price plant engineering procurement and construction contract awarded to German engineering firm SMS.
 
Altech has a 10-year offtake sales arrangement with Mitsubishi, which will see it dig the ore from a mine site at Meckering in Western Australia and process the feed into 4500 tonnes per annum of HPA at Johor.
 
Market forecasts expect demand for HPA will outstrip supply within several years.
 
Altech hopes to be in production by 2021. 
 
Shares in Altech were last traded at A13c, capitalising the company at $74 million. It has traded between 8.2-21.5c over the last 52 weeks

 

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