Altech brings in new backers to raise $20m for Malaysian high purity alumina plant
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Altech Chemicals is bringing in a bunch of new investors in a bid to raise a further $20 million to build its high purity alumina (HPA) plant in Malaysia.
Some investors didn’t seem to like the fact that Altech (ASX:ATC) is issuing more new shares at a discount, with shares dipping nearly 8 per cent to 17.5c this morning.
HPA is a high-value material needed for lithium ion battery components and synthetic sapphire used in LED lights, semiconductor wafers and scratch-resistant smartphone glass.
Altech, the most advanced player in the niche HPA space, told investors it had received commitments from a variety of institutional and professional investors for a share placement to raise roughly $17 million.
The placement is being done at 16.5c – a 13.2 per cent discount to the last traded closing price.
Altech is also offering existing shareholders $3 million worth of shares at the same price.
The company has been working to raise the cash it needs to build the 4500-tonne-per-annum HPA plant in Johor.
In mid-June it inked a non-binding deal for $US60 million ($80.6 million) in new financing.
Prior to that Altech secured a $US190 million loan from German government-owned KfW IPEX-Bank — but the release of the funds depends on the company securing the rest of the money needed to build the plant.
Altech had been considering a $US90 million mezzanine loan from a global investment bank but has now decided to equity fund stage one to “maintain project momentum”.
“The funds that have been raised will allow Altech to commence HPA plant construction in parallel to finalising project financing,” boss Iggy Tan said.
Stage one construction works are expected to begin in the current quarter.
HPA — say what?
HPA is not a widely understood commodity and there are currently only about four ASX-listed players.
It’s a small global market of about 25,000 tonnes annually.
But that is tipped to grow to around 48,000 tonnes by 2025 and 86,000 tonnes by 2030.
Altech has been contacted for comment.