Altech Batteries moves forward with CERENERGY project funding strategy
Altech Batteries (ASX: ATC) is progressing funding arrangements for the construction of its CERENERGY sodium-chloride solid-state battery manufacturing plant in Germany.
A funding invitation document was distributed to various financial institutions worldwide during the three months to December, with Altech receiving strong initial interest from 10 commercial banks and two venture debt funds.
The company said it would work with its funding adviser to shortlist potential lenders and identify the most suitable financial partners, using a secure data room to provide project information and ensure full transparency during the process.
DFS adjustment
The financial model within the project’s definitive feasibility study (DFS) has been adjusted to stress-test various funding scenarios tailored to each lending institution.
Altech will also appoint a lead bank to guide the lending process and work towards identifying the most suitable banks to form a syndicate, which will play a crucial role in structuring financing arrangements to meet project requirements.
The CERENERGY financing strategy comprises debt, equity and grants to cover capital expenditures, financing costs, debt service coverage and additional contingency for potential business interruptions.
Complex process
Altech chief executive officer Iggy Tan said financing discussions were proceeding to plan.
“The funding stage is the most complex and challenging process of any project,” he said.
“We have secured a ‘big four’ adviser with expertise and a global network, and this has been a major step in advancing our debt and equity discussions, along with offtake agreements, to fully fund the CERENERGY project.”
Several potential investors have signed non-disclosure agreements and draft term sheets have been distributed to some parties, outlining the proposed terms and conditions for investment.
Mr Tan said these documents would serve as a starting point for Altech’s negotiations and pave the way for more detailed discussions regarding potential equity stakes and partnership structures.
Project divestment
Altech engaged several advisers during the last quarter to support the equity component of CERENERGY’s funding package, which will see the company eventually divest a minority interest in the project to one or two strategic investors.
The move is aimed at reducing the overall financial burden on Altech while bringing in experienced partners who can contribute to the project’s success.
Altech said it would specifically target large utility groups, data centre operators, investment funds and corporations that are actively involved in the green energy transition.
These entities are seen as ideal partners due to their strong alignment with the project’s focus on sustainable energy solutions, as well as their capacity to provide substantial financial backing.