Altech Chemicals signs $60 million stream finance term sheet for its HPA project

Altech Chemicals announced yesterday, June 14, 2018, that it has signed a US$60 million stream finance term sheet with a US-based global alternative investment group for its proposed high purity alumina (HPA) project. Global HPA demand in 2016 was approximately 25,315 tonnes per annum and is likely to grow at a compound annual growth rate (CAGR) of 16.7 per cent, until 2024.

A stream finance facility is a structured alternative financing product whereby the facility provider agrees to pay the facility amount in advance in exchange for a percentage of future gross sales. The facility term sheet that Altech has received assures an advance of US$60 million, which would be used for the development, construction and working capital requirements of the project. It is structured to operate in conjunction with Altech’s 10-year off-take sales arrangement with Mitsubishi Australia and for repayment over the life of the project. The term sheet, however, remains subjective to the agreement of binding terms with various banks, regulatory and board approvals and due diligence. The facility would also require the acceptance of the senior debt provider and any mezzanine debt provider.  

Earlier, on February 2, 2018, Altech Chemicals had announced its execution of commitment and final terms for a US$190 million senior debt package with German government-owned KfW IPEX-Bank, while on May 11, the company received an indicative non-binding mezzanine debt term sheet from a global investment bank equal to US$ 90 million. So, combining the two, Altech received a total finance of US$340 million.

Altech managing director Iggy Tan said, "The Company is extremely pleased with the interest that is being shown from a variety of financiers in our HPA project, as is demonstrated by the term sheets received to date. We remain committed to pursuing an optimal financing structure for the Project, and will continue to keep shareholders informed of developments".