Appointment of Due Diligence Consultants
Perth, Aug 10, 2016 AEST (ABN Newswire) - Altech Chemicals Limited (Altech/the Company) (
ASX:ATC) is pleased to provide an important update on the progress of financing for its proposed high purity alumina (HPA) project.
Highlights:
- Altech and KfW IPEX-Bank appoint lenders due diligence consultants
- Technical, market and legal due diligence
- Reputable international audit firm to provide "expert opinion" also mandated
- Due diligence initiation meeting held in Stuttgart, Germany
- Due diligence site visits at Meckering and Johor conducted last week
Following the announcement on 3 August 2016, of a positive pre-assessment by the German Government interministerial committee (IMC) and Euler Hermes Aktiengesellschaft (Euler Hermes) of Altech's export credit project finance application (refer ASX Announcement dated 3 August 2016 for details), due diligence consultants have now been appointed.
The due diligence consultants are to undertake the definitive technical, market and legal review of the project on behalf of the proposed financier, Germany's government-owned KfW IPEX-Bank supported by German export credit agency Euler Hermes.
The appointment of the due diligence consultants is a significant milestone for project financing and will culminate in the provision of an "expert opinion" on the projects viability and risks.
The appointed due diligence consultants are:
Technical
M.Plan International Limited
Review the technical, environmental and social aspects of the project. Including amongst others, the geology, mineral resources and reserves, metallurgical test work, construction budget and schedule, infrastructure, permitting, environmental and social aspects.
Market
Persistence Market Research
Assessment and confirmation of HPA target market, product production, consumption, demand, trade, and a review and validation of proposed sale quantities and considered prices use in the project financial modelling.
Legal
Freshfields Bruckhaus Deringer
Assessment and confirmation of legal aspects of the project including permits, licences, contractual terms, structuring, and financial transactions. Adnan Sundra & Low is engaged as Malaysian counsel and Minter Ellison as Australian counsel. Freshfields will act as lenders' legal counsel to KfW.
Expert Opinion on Financing for Euler Hermes
An Expert Opinion on the project's overall viability, assessment and justification of project risks will be provided by a "reputable international audit firm". The expert opinion is required for the grant of export credit cover for project financed transaction and issued to the responsible authorities of the Federal Republic of Germany (FRG) represented by the German Export Credit Agency (ECA) - Euler Hermes.
A due diligence initiation meeting was held in Stuttgart, Germany recently, with representatives from the appointed due diligence consultants as well as M+W Group (engineering procurement and construction contractor) and KFW IPEX-Bank in attendance. At the meeting technical due diligence consultants M.Plan International Limited and market due diligence consultants Persistence Market Research each presented their initial preliminary findings, which identified no fatal flaws in the project. The initiation meeting was chaired and facilitated by Altech managing director Iggy Tan, in conjunction with KfW IPEX-Bank project leaders.
Due diligence activities have now progressed to the next stage and site visits were conducted last week by the various consultants, to the Company's Meckering kaolin deposit; the HPA pilot plant site at Simulus Engineering's Perth testing facility and to the proposed HPA plant site at the Tanjung Langsat Industrial Complex, Johor, Malaysia.
Altech managing director Mr Iggy Tan said, "The commencement of the Lenders detailed project due diligence is a significant advance towards finalising project financing. The site visits last week follow an extremely constructive due diligence initiation meeting in Stuttgart, Germany during which all participants were updated on the status of project detailed design and funding plans. The site visits enabled the consultants to quickly familiarise themselves with the project, the Company and provided for specific queries to be answered in a most effective manner."
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About Altech Batteries Ltd
Altech 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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