Altech Chemicals sells 25% interest in German subsidiary for $8.3m

Altech Chemicals ASX ATC Advanced Materials Frankfurt stock exchange
Frankfurt Stock Exchange-listed Altech Advanced Materials has paid the initial cash consideration of $415,000 for the 25% stake, with the remainder to be paid over three years.

Altech Chemicals (ASX: ATC) has sold a 25% stake in its German subsidiary Altech Industries Germany GmbH for €5 million (A$8.3 million).

Frankfurt Stock Exchange-listed Altech Advanced Materials AG has made the purchase and provided an initial €250,000 (A$415,000) in cash for the 25% interest.

The remaining €4.75 million (A$7.92 million) is payable over three years via equal instalments of €1.583 million (A$2.63 million) on each annual anniversary of the initial cash payment.

In the interim, Altech will receive interest of 3% per annum on the outstanding deferred consideration – equating to about A$240,000 a year.

Altech retains a majority 75% ownership of the German subsidiary. Additionally, the company holds almost 18% of Altech Advanced Materials.

Under the deal, Altech Industries Germany has the right to use Altech’s high purity alumina manufacturing technology via a licencing agreement. This includes any future anode grade HPA Altech develops.

In return for the technology, the German subsidiary will pay a fee to Altech.

Rationale behind sale

Altech managing director Iggy Tan said the sale of its 25% interest to Altech Advanced Materials will “better position” Altech Industries Germany in applying for European Union and German manufacturing incentives.

These incentives are available as part of Europe’s strategy to bring supply chains closer to home to increase the region’s self-reliance on critical raw materials such as those required for manufacturing lithium-ion batteries.

“For Altech, an Altech Industries Germany that is co-funded and will be champion in Germany and Europe by an extremely supportive German shareholder (Altech Advanced Materials) was an opportunity not to be missed,” Mr Tan explained.

“Altech continues to remain focused on delivering the close of funding for our Johor HPA plant, however selling 25% of our German subsidiary to Altech Advanced Materials will both assist in the future funding of Altech Industries Germany and with the due diligence and feasibility study work that has been initiated for a second HPA plant in Germany,” he added.

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