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News and Announcements

Altech Chemicals Ltd (ASX: ATC) Receives AUD $11 Million Investment from SMS Group

  • Published November 14, 2017 12:00AM UTC
  • Publisher Wholesale Investor
  • Categories Company Updates

KEY TAKEAWAYS:

  • Altech gets a total of $15 million commitment from SMS Group, following its latest additional equity investment of $11 million and the initial $4 million commitment made earlier.
  • This is an indication of the commitment of SMS to Altech’s high purity alumina (HPA) project where SMS is the lead engineering, procurement and construction (EPC) of the HPA plant.
  • Altech’s HPA plant in Tanjung Langsat Industrial Complex will produce HPA from kaolin clay which will be sourced by the company from its kaolin deposit in Meckering, Western Australia.

Altech Chemicals Limited got an additional equity investment of US$11 million from SMS Group, subject to the financial close of the $185 million debt facility targeted by Altech during the first semester of 2018.

This brings the total equity commitment of the SMS Group at $15 million including the $4 million it initially invested on Altech.

SMS, an engineering company based Düsseldorf, Germany with up to 3.3 billion Euros in yearly turnover, builds turnkey solutions for processing plants. This includes buildings, infrastructure, innovative plant technology and auxiliary equipment.

“The Company welcomes the additional direct investment by SMS in Altech; it demonstrates the commitment and confidence of the EPC contractor to the HPA project and the Company. We are very fortunate to have such a supportive partner in this project,” Altech Managing Director Iggy Tan said.

Altech aims to become one the leading suppliers of HPA in the world and is now in the process of securing financing for its project which is expected to start development in 2018. HPA is considered a highly in-demand, high-value product, as it is a critical ingredient in the production of synthetic sapphire. Synthetic sapphire is essential in the manufacture of wristwatch glass faces, substrates for LED lights and in the production of semiconductor wafers in the electronics industry.

The demand for HPA is expected to increase at a compound annual growth rate of 16.7% as a result of the adoption of LED globally as an energy-efficient form of lighting. Consumers all over the world are replacing the traditional incandescent light with LED.

About Altech Chemicals Ltd (ASX: ATC)

Altech Chemicals is aiming to become one of the world’s leading suppliers of 99.99% (4N) high purity alumina (HPA) (Al2O3). Altech Chemicals market capitalisation increased four-fold since July 2015 following the release of its Bankable Feasibility Study (BFS) for construction of a 4,000tpa HPA plant at Johor, Malaysia. The project has an NPV of US$357 million (9% discount) and capital costs of a meagre US$79 million. Altech Chemicals is in the funding stage with German KfW IPEX-Bank.

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