Stellantis N.V. (BIT:STLAM) entered into a definitive agreement to acquire 19.9% stake in Argentina Litio Y Energia S.A. from Argentina Lithium & Energy Corp. (TSXV:LIT) for ARS 31.5 billion on September 26, 2023. Further, the Company has granted Stellantis the Exchange Right to exchange all of the ALE Shares for up to 19.9% of the outstanding common shares of Argentina Lithium (on an undiluted basis) (?Common Shares?) in the future, subject to certain conditions. The proceeds of the Transaction will be used to advance development of the Company?s lithium projects held through its wholly owned subsidiary in Argentina, and for general corporate purposes. Argentina Lithium and Stellantis will enter into a Lithium Offtake Agreement (the ?Offtake Agreement?).
Under the Offtake Agreement, ALE has agreed to sell to Stellantis, and Stellantis has agreed to purchase from ALE up to 15,000 tonnes per annum of lithium produced by ALE over a seven-year period (the ?Supply Obligation?) subject to the terms and conditions set out in the Offtake Agreement. Argentina Lithium, ALE and Stellantis will enter into a Shareholders? Agreement (the ?Shareholders? Agreement?) relating to ALE and Stellantis? ownership of ALE Shares and provides for the following principal terms:
? right of Stellantis to nominate one director to the board of directors of ALE (?Stellantis Director?) for as long as Stellantis has an ownership position of not less than 10% of the issued and outstanding ALE Shares;
? certain corporate decisions of ALE may not be undertaken without the affirmative vote the Stellantis Director or the approval by shareholders holding more than 90% of the issued and outstanding ALE Shares;
? right of each shareholder to maintain its ownership percentage in any equity offerings by ALE;
? transfer restrictions including, rights of first refusal, drag-along and tag-along rights;
? right of first offer for Stellantis to provide project financing and any other borrowing by ALE; and
? other terms and conditions consistent with a transaction of this nature.
Closing of the Transaction is subject to Argentina Lithium obtaining TSXV approval, ALE completing certain corporate actions relating to the Transaction and other closing conditions set out in the Investment Agreement. The Transaction is anticipated to close on or about October 4, 2023. PI Financial Corp. is acting as financial advisor to Argentina Lithium in connection with the Transaction. The Board of Directors of Argentina Lithium has received a fairness opinion from PI Financial Corp, stating that, as of the date of such opinion, and based upon and subject to the assumptions, limitations and qualifications stated in such opinion, the consideration to be received by the Company pursuant to the Transaction is fair, from a financial point of view, to Argentina Lithium shareholders. Blakes, Cassels & Graydon LLP acted as Canadian legal counsel and Alfaro-Abogados SC acted as Argentinian legal counsel to Argentina Lithium in connection with the Transaction.