Altech Batteries Ltd Stock Market Press Releases and Company Profile
Half Yearly Report and Accounts
Half Yearly Report and Accounts

Perth, Mar 15, 2018 AEST (ABN Newswire) - The Directors present their report on Altech Chemicals Ltd (googlechartASX:ATC) for the half-year ended 31 December 2017.

REVIEW OF OPERATIONS

During the half-year ended 31 December 2017 the Company made significant progress towards arranging the funding that will be required for the commencement of construction of its proposed Malaysian high purity alumina (HPA) plant and associated kaolin mine in Meckering, Western Australia (HPA Project).

On 15 December 2017 Altech was pleased to announce that it had been advised that the German government inter-ministerial committee (IMC) had reached a positive decision on its application for project finance export credit cover relating to the Company's proposed Malaysian high purity alumina (HPA) plant. Following the IMC decision, the Company was advised by German government owned KfW IPEX-Bank that it had successfully processed credit approval for a project finance debt package of US$190 million, comprising US$170 million of project finance export credit cover (available at long tenure and at highly attractive terms) and US$20 million at customary lending terms.

Subsequent to half-year end, the Company executed commitment, terms and conditions documentation with KfW IPEX-Bank to formalise the US$190 million debt package. A condition precedent to draw-down of the KfW IPEX-Bank debt is that the Company secures the necessary project equity. The final equity component of project funding will be determined as the Company works through various funding options, which may include the inclusion of mezzanine finance, and/or project level equity participation. Finalisation of this balance of project funding will be the focus of the Company during the first half of 2018.

The Final Investment Decision Study (FIDS) results for the Company's HPA Project were published in October 2017. The FIDS incorporated up-to-date project assumptions including the final capital cost estimate which includes a fixed-price lump-sum engineering, procurement and construction (EPC) contract value for the proposed Malaysian HPA plant; a fixed-price lump-sum EPC contact value for construction of a container loading facility at Meckering, Western Australia; and the capital cost for the initial kaolin mining campaign. The financial metrics for the FIDS are extremely robust. Project Net Present Value (NPV) is US$505.6 million at a discount rate of 7.5%, payback (at full rate) is 3.9 years and annual EBITDA at full production is US$75.7 million. The internal rate of return (IRR) is 21.9% with a gross margin on sales of 63%. Publication of the FIDS results was a significant milestone for the Company. The FIDS results, combined with the extensive and detailed project due diligence conducted by bank appointed independent due diligence consultants, provided the foundation for the US$190 million debt package negotiated with KfW-IPEX Bank.

In October 2017 the Company was successful in arranging a $17.0 million placement of new shares to a variety of existing and new shareholders. Proceeds from the placement were used to continue the development of the Company's HPA project and will include payments for land at Meckering and Johor, plus final HPA plant design and engineering as well as working capital and corporate costs. The placement was strongly supported by the appointed EPC contractor for the proposed Malaysian HPA plant, German engineering firm SMS group, which subscribed to US$4.0 million (A$5.3 million) of shares; SMS group now holds approximately 9% of the Company's total issued capital. The Melewar group, an existing major shareholder, and associates subscribed to A$3.0 million of new shares.

Other significant developments during the half-year ended 31 December 2017 included:

- Works approval was received from the Western Australian Department of Water and Environmental Regulation for construction of the proposed kaolin screening and loading facility at the Company's Meckering kaolin deposit.

- The Company exercised its option to purchase the ~94Ha of freehold farm-land, within which sits granted mining lease M70/1334 which hosts its Meckering kaolin deposit.

- The design of the proposed Malaysian HPA plant was finalised. The final design resulted in an increase in plant capacity to 4,500tpa (was 4,000tpa) and the design now incorporates a flexible finished product line capable of producing HPA for both the synthetic sapphire industry and HPA for the lithium-ion battery industry.

- SMS group Gmbh, the German engineering firm appointed as the engineering, procurement and construction (EPC) contractor for the Company's proposed HPA plant committed to US$15.0 million of equity support for the Company. US$4.0 million was provided to the Company as part of the $17.0 million share placement announced in October 2017. The balance of equity support (US$11.0 million) is proposed at project funding financial close upon satisfaction of the various conditions precedent to draw-down of the KfW-IPEX project finance debt.

- The Company launched a German language version of its website in response to the increased interest in its HPA project from European based retail and institutional investors and various German-based stakeholders.

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About Altech Batteries Ltd

Altech Chemical Ltd ASX:ATCAltech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns. 

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.

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Contact

Corporate
Iggy Tan
Managing Director
Altech Batteries Limited
Tel: +61-8-6168-1555
Email: info@altechgroup.com

Martin Stein
Chief Financial Officer
Altech Batteries Limited
Tel: +61-8-6168-1555
Email: info@altechgroup.com



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