The indicative mezzanine debt sheet was received from an international investment bank and is in addition to the US$190 million senior debt package with KfW IPEX-Bank.
Altech has been working with a number of advisors to secure the balance of funds for the proposed HPA plant and associated kaolin mine.
One of the options being pursued was a mezzanine debt facility of up to US$120 million.
Mezzanine debt option a good result for shareholders
Altech’s 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.”
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A key condition to be satisfied before drawing down on the US$190 million from German government-owned KfW IPEX-Bank is securing a balance of funds for the associated kaolin mine in Western Australia that will feed the HPA plant.
The company has been considering a number of options including mezzanine debt, taking on a partner, an equity raising and a royalty sale.
Altech expects more similar term sheets
The received US$120 million indicative mezzanine debt term sheet represents a facility amount of US$90 million plus accrued interest during construction and plant commissioning.
The term sheet was from an investment bank with a global presence and more than US$300 billion in assets under management.
Altech expects similar term sheets from other potential lenders currently in due diligence and evaluation during the course of the month.