Altech Chemicals Ltd (ASX:ATC) Mezzanine Loan Facility Update

Perth, Australia, Mar 5, 2020 - (ABN Newswire) - Altech Chemicals Limited (ASX:ATC) (HAM:A3Y) is pleased to provide an update on the progress on its proposed US$90 million mezzanine loan facility.

Altech continues to work with its preferred mezzanine lender Macquarie Bank (Macquarie) to secure a US$90 million mezzanine loan facility. An update meeting was recently held with Macquarie in London, where when pressed by Altech the Macquarie team reaffirmed its continued interest in providing the facility - especially given the recent increased profile of planned lithium-ion battery plant construction in Europe, and a stated industry preference for securing long-term battery materials supply.

Finalising a facility remains subject to Macquarie satisfying all of its due diligence, various internal approvals and inter-creditor arrangements with senior lender KfW IPEX-Bank. Macquarie has progressed discussions with the bank and its legal counsel (Freshfields), regarding access to the previous legal due diligence work and updates to this work.

Whilst Altech has a ten-year offtake sales arrangement with Mitsubishi Corporation's Australian subsidiary, Mitsubishi Australia Ltd (Mitsubishi), Macquarie stressed to Altech the importance of it selling a proportion of its planned HPA production to an end user at fixed product prices to demonstrate some pricing transparency in an otherwise opaque market.

The recent posting of Altech alternate director Mr Uwe Ahrens to Germany (refer ASX Announcement 27 February 2020) is already starting to deliver increased engagement with emerging participants in the bourgeoning European lithium-ion battery sector. Response to the promotion of Altech's HPA project and its 99.99% (4N) HPA product has been positive. The Company's objective is to link with one or more HPA end-users that appreciate the advantage of a current commitment to accept future volumes of its 4N HPA product at pre-agreed or other transparent pricing, and/or to directly partner with Altech for the development of its HPA project.

About Altech Chemicals Ltd:

Altech Chemicals Limited (ASX:ATC) (FRA:A3Y) is aiming to become one of the world's leading suppliers of 99.99% (4N) high purity alumina (HPA) (Al2O3).

HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.

Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.

Contact:

Corporate
Iggy Tan
Managing Director
Altech Chemicals Limited
Tel: [phone]
Email: [e-mail]

Shane Volk
Company Secretary
Altech Chemicals Limited
Tel: [phone]
Email: [e-mail]

Investor Relations (Europe)
Kai Hoffmann
Soar Financial Partners
Tel: [phone]
Email: [e-mail]

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