Altech targets increased project debt of US$70 mln

Altech Chemicals Limited announced that the company’s targeted debt financing for its proposed Malaysian high purity alumina (HPA) project has increased to US$70 million (previously US$60 million).

The export credit cover (ECA) component to be covered by the German export credit agency (ECA), Euler Hermes Aktiengesellschaft (Euler Hermes) has increased from US$40 million to US$60 million. Accordingly, Altech has reduced the targeted amount for the remaining uncovered debt portion from US$20 million to US$10 million, which has resulted in a revised total project debt target of US$70 million.

In accordance with the positive cursory pre-assessment undertaken by Euler Hermes (please refer to ASX Announcement of 3 August 2016 for details), the company’s ongoing due diligence process has the objective of an application for ECA-cover incorporating the abovementioned adjusted debt structure.

Furthermore, German government-owned KfW IPEX-Bank, mandated to provide debt structuring and advisory services to the company, has proposed a simple and cost effective “sole lender” debt structure whereby the entire US$70 million of project debt is proposed to be provided exclusively by KfW IPEX-Bank (subject to ongoing due diligence and respective loan approval).

The interest rate of project finance debt supported by ECA cover is very attractive, consequently the overall cost of debt for the company shall be reduced compared to the originally contemplated structure.

Altech managing director Mr Iggy Tan said, “Increasing the ECA application amount to US$60 million for our proposed HPA project is an extremely positive outcome for the Company and testament to the projects financial robustness. A single project lender will significantly simplify and streamline financing, documentation and securitisation. Also, the increased proportion of ECA covered debt will reduce the overall interest rate that will apply to project borrowings. The equity component of the project will be finalised when detailed design capital cost of the project is completed.

“The next steps for project financing include a formal application for the in principle ECA cover and the completion of the bank-initiated independent due diligence”, he concluded."

Copyright and Exemption Declaration :¢ÙAll articles, pictures and videos that are marked with "China Aluminum Network" on this website are copyright and belong to China Aluminium Network (www.alu.com.cn). When transshipment, any media, website or individual must list the source from "China Aluminium Network (www.alu.com.cn)". We seek legal actions against anyone that disobey this. ¢ÚArticles that marked as copy from others are for transferring more information to readers, do not represent or endorse their opinions or accuracy and reliability. When other media, website or individuals copy from our website, must keep the source. Anyone that changes the articles' sources will hold the responsibilities for copyright and law problems. We also seek legal actions against anyone that disobey this. ¢ÛIf any articles copied by our website concern the copyright and other problems, please contact us within one week.