News and Announcements
Altech Chemicals (ASX: ATC) Successful In Securing Project Finance
- Published December 25, 2017 12:00AM UTC
- Publisher Wholesale Investor
- Categories Company Updates
KEY TAKEAWAYS:
- Altech Chemicals (ASX; ALT) has been successful in securing an increase in both it’s loan amount as also export credit cover being provided by German-government owned KfW IPEX-Bank.
- Being a specialized supplier of HPA, Altech is in the process of producing the material at its manufacturing facility in Malaysia using kaolin clay which will be mined in Western Australia.
- The company’s managing director was euphoric at the extra margin provided and labelled the terms of the deal as being truly attractive.
Australian based HPA supplier Altech Chemicals (ASX: ATC) has been successful in securing a raise in finances required for the development of projects scheduled to take off in 2018.
Initially, the project cost was proposed at US $185 million and the export credit cover was placed at US $165 million. Both figures have henceforth been revised with the result that approved financial package now stands at US $190 million and the export credit cover stands at US $170 million. Another balance of US $20 million has been kept as standby and will be subject to commercial situation.
Altech specializes in manufacturing high purity alumina (HPA) which is a high-value high-margin product owing to being a crucial ingredient for producing synthetic sapphire. Because HPA is yet to have a substitute, it is in high demand with annual growth figures placed at 16.7%. On its part, synthetic sapphire, the outcome of HPA, enjoys extensive application in manufacturing of LED lights, semiconductor wafers, smartphone components and so on.
In contrast to the current manufacturers of HPA that use aluminium metal, Altech has set up a manufacturing facility at Malaysia that would use kaolin clay to produce HPA. Raw material for the process will be sourced from Meckering in Western Australia wherein the company enjoys 100% ownership of the mines. It is the company’s belief that HPA produced in this manner would be priced significantly lower than the current level owing to reduced production costs.
As per Altech’s Managing Director, Mr Iggy Tan, the decision by government-owned German KfW IPEX-Bank is reflective of the confidence that the financier has on Altech’s ability and the project overall. He went on to express euphoria over the financing company’s decision to increase the lending amount and mentioned that the entire package was a truly attractive proposition.