Galaxy withdraws from battle for Alita

GALAXY Resources says it won’t amend a deed of company arrangement proposal for collapsed Alita Resources, paving the way for the Chinese to take control.
Galaxy withdraws from battle for Alita Galaxy withdraws from battle for Alita Galaxy withdraws from battle for Alita Galaxy withdraws from battle for Alita Galaxy withdraws from battle for Alita

Bald Hill in WA's Goldfields

Galaxy and China Hydrogen Energy (CHE) both submitted DOCA proposals to recapitalise the company, but administrator KordaMentha said on Friday CHE's would deliver a "markedly superior" outcome to creditors.

Galaxy today said it was able to conduct extensive due diligence on the Alita assets and liabilities, including the suspended Bald Hill mine.

The company said it was not prepared to amend the offer terms included in its proposed DOCA.

Galaxy was Alita's largest shareholder and also its largest secured creditor.

The administrators have now repaid US$32.5 million owed to Galaxy, using a A$70 million loan facility provided by CHE.

The funds received by Galaxy will be used to fully repay the US$31.1 million facility drawn down to fund the acquisition of Alita's debt.

It will leave Galaxy debt-free.

CHE had been asked to provide an unconditional deed of company arrangement proposal by today, which administrators said would be outlined in a report to creditors due in about two weeks.

The Bald Hill mine in Western Australia's Goldfields will remain suspended.