Emerging high purity alumina (HPA) producer Altech Chemicals (ASX: ATC) is on track to secure additional financing for its Malaysian project, advising the market that preparations for its proposed listed green bond offering of US$144 million (A$186 million) are “progressing well”.
Green bonds raise funds for new and existing projects that deliver positive environmental benefits and a more sustainable economy.
Altech’s HPA processing plant in Johor, Malaysia, was formally assessed as ‘green’ by the independent Centre of International Climate and Environmental Research (CICERO) last year as the company demonstrated its disruptive HPA production technology can deliver an estimated 49% reduction in carbon footprint (compared to conventional HPA processing), and use about 41% less energy.
In addition, the primary end-use for Altech’s HPA is targeted for sustainable energy products including LED lights and lithium-ion batteries.
Due diligence completed
In an announcement today, the company said preparations for the green bond offering have progressed to a point where due diligence is complete, including an environmental social governance (ESG) audit, the distribution of a draft facility agreement, and the review of a preliminary offering document.
Altech is aiming to raise US$144 million (A$186 million) from the proposed bond issue, of which US$100 million (A$130 million) will be used as secondary debt for the Johor HPA plant. The additional US$44 million (A$56 million) is expected to service bond interest during the HPA plant construction phase.
The company has already secured US$190 million (A$246 million) under a senior project finance loan facility with German government-owned KfW IPEX-Bank.
The bond issue process consists of the initial preparation phase (currently underway), where legal documentation, structures, teasers, draft investment memorandum, and comprehensive corporate presentation packs are developed and then distributed to prospective subscribers.
This is followed by the opening of a data room for a bookbuild phase, which Altech said will only initiate upon positive “soft soundings” during the preparation phase, and will optimally be conducted in a period of positive overall market sentiment.
The final phase of the bond issue is execution, when commitments are settled and bond proceeds formally deposited with the special purpose vehicle. Application for listing the bonds on the Frankfurt Stock Exchange would be made following the closing, Altech said.
“Preparation work is progressing well and on schedule,” the company stated.
Malaysian processing plant
Altech is aiming to become one of the world’s leading suppliers of 99.99% (4N) HPA through the construction and operation of a 4,500-tonne-per-annum processing plant at Johor. Feedstock for the plant will be sourced from the company’s wholly-owned kaolin deposit in Meckering, Western Australia and shipped to Malaysia.
Stage two early works construction of the plant was completed in June 2020.
Last month, Altech commenced battery performance testing of graphite particles, which have been subject to its proprietary HPA coating technology.
Altech has launched the development of two new products – which could combine with its HPA coating technology to improve a number of performance features in lithium-ion batteries including coulombic efficiency (CE), cycling stability and fast charging capability.
The company also launched the development of two new products – Anode Grade APC01 and Anode Grade ALC01 – which will be manufactured by Altech’s Malaysian plant and will not require any new or specialised equipment.