Altech Chemicals Ltd (ASX: ATC) Successful with AUD$17 Million Share Placement

KEY TAKEAWAYS:

• Altech Chemicals Ltd raised A$17-million in a successful share placement involving 122.9 million ordinary shares which were fully paid.
• Altech’s new investors are SMS Group GmbH with a commitment of$5.1 million and the Melewar Group with an investment of A$3 million.
• Altech shareholders have yet to approve the placement shares of both SMS Group GmbH and Melewar Group.

Altech Chemicals Ltd (ASX: ATC) is an Australian chemicals company supplying high purity alumina – a high-value product – with blue-chip clients such as Mitsubishi Corp. The company was able to raise $17.2-million worth of commitment after investors fully paid around 122.9 million of the company’s ordinary shares.

“The Company very much welcomes the direct investment by SMS in Altech; it strongly demonstrates their commitment and confidence as EPC contractor to the project. The ongoing support of Melewar Group is equally important; the group has supported the Company since 2015 and is a strong believer of our HPA project and the construction of the high purity alumina plant in Malaysia. The Placement leaves us well capitalised to complete the optimal funding arrangements for the HPA project in 2018,” Altech Managing Director Iggy Tan said.

Tan considers the placement as a “vote of confidence” in the HPA project of Altech.

The fresh funds will be used for Altech’s high-purity alumina (HPA ) project including payments for detailed engineering design, payment for lands in Johor, Malaysia and Meckering, Western Australia. The company, which is based in Subiaco, Western Australia, plans to build an HPA plant in Johor, Malaysia’s Tanjung Langsat Industrial Complex, with a per annum capacity of 4,000 Metric Tons (MT) of HPA.

Among the commitments gathered by Altech are the A$5.1 million commitment from SMS group GmbH (SMS) and the A$3 million commitment from Khyra (Melewar Group) which is associated with Altech non-executive director Tunku Yaacob.

Both the SMS Group and Melewar Group placement share issuances will be subject to the approval of company shareholders during the annual general meeting slated at the end of November this year. The company will, however, issue the other placement shares from its share placement capacity under the Listing Rules of the ASX.

The shares were made available at a US$0.14 issue price per share, representing a discount of 17% below 15-day volume-weighted average per price (VWAP) of the company shares on the ASX.

About Altech Chemicals (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 meager US$79 million. Altech Chemicals is in the funding stage with German KfW IPEX-Bank.

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