They just keep on ticking the boxes ...
10 December 2015
ALTECH RECEIVES LETTER OF INTEREST FOR
GERMAN EXPORT CREDIT COVER
Highlights
• Letter of Interest (LOI) received from Euler Hermes for German export credit cover (ECA)
• Approximately US$40.0 million of project capital estimated to qualify for ECA cover
• Debt supported by ECA cover is typically at attractive conditions, including long tenure
Altech Chemicals Limited (Altech/the Company) (ASX: ATC) is pleased to report that following a recent
presentation to Euler Hermes Aktiengesellschaft ("Hermes") in Hamburg, Germany and its preliminary evaluation of
the Company’s proposed high purity alumina (HPA) project, Hermes has issued a Letter of Interest (LOI) confirming
in principle support under the export credit insurance guarantee scheme of the Federal Republic of Germany (ECA
cover).
The LOI is based on the information provided and subject to further in-depth due diligence. In addition, the LOI is
not legally binding and has been issued without prejudice to any decision of authorities to provide cover for this
project.
The Company has estimated that approximately US$40.0 million of project capital expenditure (from total project
capital expenditure of ~US$77.0 million) should qualify for ECA cover and additional senior debt in the region of
US$ 15 million, for total project debt financing of around US$ 55 million. Interest rates charged by lenders on debt
that is supported by ECA cover is typically at attractive conditions, as the repayment of the debt is insured, also
long tenure is usually available in accordance with OECD guidelines.
The initial assessment by Hermes of the availability of ECA cover for Altech’s HPA project is a significant financing
milestone and closely follows the Company’s 2 December 2015 announcement that is has executed a mandate
with German bank KfW IPEX-Bank in relation to senior debt project financing.
The next step in securing ECA cover is the submission of a formal application accompanied by a detailed project
information memorandum and various supporting documents. Detailed project due diligence follows, and will be coordinated
by the Company’s mandated bank and its German based project financing consultants.
Altech’s managing director, Mr Iggy Tan said that the Letter of Interest from Hermes is a very significant milestone
in the Company’s endeavours for funding its HPA project. “Obtaining this LOI from Hermes in such a short period of
time has been a complete team effort involving our Perth based management, German based financing
consultants, KfW IPEX-Bank and our general EPC contractor M+W Group. Feedback from our financing
consultants is that only selected projects pass the very important initial assessment by Hermes and that cover is
awarded to the vast majority of the projects that succeed at the initial evaluation. ECA cover and subsequent senior
debt project financing is still subject to detailed due diligence and there is no guarantee that ECA cover or final debt
funding for the project will eventuate, however the Hermes LOI is a significant milestone.
BUYING more ........still holding Dej ???
ALTECH DEBT DUE DILIGENCE
AT AN ADVANCED STAGE
Highlights
• Debt due diligence at an advanced stage
• Confirmatory pilot plant test work in South Africa, Australia and Germany
• HPA market study completed
• Technical due diligence at an advanced stage
• Permitting in Malaysia and Australia progressed
Altech Chemicals Limited (Altech/the Company) (ASX: ATC) is pleased to provide an update on the due
diligence activities associated with the financing of its proposed high purity alumina (HPA) project. The various
independent reviews and associated confirmatory pilot plant test work are now well advanced and nearing
completion.
Altech has been working exclusively with German KfW IPEX-Bank on project finance structuring. The
Company is currently targeting US$70 million of project debt; the majority of which is aimed to be subject to
German export credit cover (ECA), typically offered at attractive interest rates and terms; the remainder is
expected to be available on normal commercial loan terms.
On 10 August 2016 the appointment of due diligence consultants by Altech and KfW IPEX-Bank was
announced. The consultants are engaged to undertake definitive technical, market and legal reviews of the
Company’s HPA project, with an independent “expert opinion” report presented at the conclusion of the
reviews for the benefit of the ECA.
The due diligence consultants completed site visits to Meckering, Fremantle and Perth, Western Australia and
to Johor, Malaysia in early August 2016 and their respective initial reviews did not identify any major flaws in
the HPA project. However various pilot plant confirmatory test work programs were requested and detailed
audits initiated accordingly. The test work programs and audits are now well advanced.
Commenting on the due diligence activities, Altech managing director Iggy Tan said, “The last five months
have been extremely busy for the Company as we worked with the various due diligence consultants to
complete confirmatory pilot plant test work and respond to a large number of detailed information requests.