HPA plant construction will run in parallel to finance close, as stage I construction is already funded and will commence imminently.
In May 2018, Altech reported that it had received an indicative mezzanine debt term sheet for a drawdown facility of US$90 million from a global investment bank for its HPA project.
Altech revealed in June 2018 that it has executed an indicative non-binding term sheet for a US$60 million stream finance facility with a US based global alternative investment group.
The proposed mezzanine debt provider and the proposed stream facility provider appointed Advisian, the independent consulting arm of WorleyParsons Group, as independent technical adviser in July 2018.
It is currently anticipated that Advisian will require until the end of November 2018 to finalise its work, resulting in a 4-month due diligence process.
Assuming a positive result from the Advisian due diligence, the next step for both the proposed mezzanine lender and the stream finance facility provider will be to present the project to respective internal investment committees for final approval.
HPA plant construction in parallel to project finance close
The decision by Altech to equity fund stage I construction of its HPA plant in parallel with project finance close, rather than wait for close to occur, is allowing project momentum to be maintained which is considered important by the company given the forecast near-term surge in HPA demand.
At Altech’s Johor HPA site, clearance of the site is now complete, a ground-breaking ceremony was conducted on 8 August 2018 and geotechnical drilling is now also complete – allowing for the submission of a site development order application to local Johor authorities.
Once the development order is approved, site earth works, drainage, foundation piling and the construction of a workshop building and of an electrical substation will commence.
Altech managing director Iggy Tan said: “The mezzanine debt and stream facility technical due diligence is on track and proceeding as planned.
“Detailed project due diligence is a requirement of the respective proposed lenders internal credit approval processes and will take time to complete.
“Altech is working very closely with the proposed lenders to ensure a detailed evaluation of the project is successfully concluded.
“Importantly, the time taken to complete due diligence and to reach finance close will not hinder construction progress, as stage I construction is already funded and will commence imminently.
“Construction of the company’s HPA plant will run in parallel to finance close.”