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Danakali's new substantial shareholder AFC has 16.63% stake in potash developer

Published: 08:54 13 Dec 2019 AEDT

Danakali Ltd - Danakali's new substantial shareholder AFC has 16.63% stake in potash developer
The company is in the pre-development stages of the Collulli SOP Project

Danakali Ltd (ASX:DNK) (LON:DNK) has a new substantial shareholder in Africa Finance Corporation (AFC) which has a 16.63% stake after completing the first tranche of a strategic equity investment.

The tranche of almost 53 million shares at 60 cents per share was completed on December 10, 2019, and valued in excess of US$21.5 million (~A$31.8 million).

AFC’s investment is part of the overall funding package for development and construction of Danakali’s Colluli Sulphate of Potash (SOP) Project in Eritrea.

Tranche 2 upcoming

Tranche 2 will consist of about 70 million shares at the same issue price as the first tranche to raise another US$28.5 million (~A$42 million).

This is subject to Danakali shareholder approval at a general meeting expected to be held in February 2020, execution of senior debt documentation and other conditions precedent.

Total US$150 million participation

The placement takes AFC’s total participation to US$150 million which demonstrates their major and long-term commitment to the project, Danakali and Eritrea.

This comprises US$50 million in Danakali equity plus US$100 million of credit approved Colluli Mining Share Company (CMSC) senior debt.

“Momentum towards financial close”

Danakali’s chief executive officer Niels Wage said recently: “I am very pleased to have secured AFC as a strategic equity investment partner.

“It marks a significant milestone for Danakali and continues our momentum towards financial close.

“Danakali has made good progress over the past 12 months having secured a large proportion of the development capex for Module I and demonstrated a sustainable approach to the future development of Colluli.”

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