Proactive Investors - Run By Investors For Investors

Altech Chemicals prepares to begin HPA plant construction, to run in parallel with finance close

Altech is equity funding stage I construction of its HPA plant in Malaysia in parallel with project finance close.
Ground-breaking ceremony
Ground-breaking ceremony was conducted on August 8, 2018

Altech Chemicals Ltd’s (ASX:ATC) (FRA:A3Y) mezzanine debt and stream facility technical due diligence is on track and proceeding as planned for its proposed Malaysian high purity alumina (HPA) plant.

HPA plant construction will run in parallel to finance close, as stage I construction is already funded and will commence imminently.

Background

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.

READ: Altech Chemicals signs US$60 million stream finance facility for alumina project

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.

READ: Altech Chemicals advancing plant construction in Malaysia

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.”

View full ATC profile View Profile

Altech Chemicals Ltd Timeline

Related Articles

Pamlico project picture
June 24 2019
Newrange is earning into 100% of its flagship project via staged annual payments up to 2044
1557833995_Kincora-drill-rig.jpg
May 14 2019
Kincora has a huge swathe of ground in Mongolia which it is now getting ready to drill
lights
June 19 2019
When fully operational, Barruecopardo will account for around 13% of non-Chinese global supply of tungsten concentrates.

© Proactive Investors 2019

Proactive Investors Australia PTY LTD ACN:132787654 ABN:19132787654.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use