Liontown Resources, a prominent player in the lithium industry, finds itself at a critical juncture. After U.S. lithium giant Albemarle scrapped a proposed takeover citing the involvement of Australia’s richest person, Gina Rinehart, Liontown’s CEO, Tony Ottaviano, sheds light on the company’s path forward.
The Abandoned Takeover: Albemarle’s Disengagement
Albemarle’s decision to withdraw from the $4.16 billion takeover plan has left Liontown Resources assessing its next moves. The difficulty of completing the deal after Gina Rinehart’s Hancock Prospecting acquired a significant stake became apparent, leading to the downfall of the proposed agreement. Despite this setback, Ottaviano mentions that there haven’t been any recent communication with Albemarle since the announcement.
The Future with Hancock Prospecting
As the new major shareholder, Gina Rinehart’s Hancock Prospecting holds a 19.9% stake in Liontown Resources. Ottaviano confirms that discussions regarding equity raising have taken place with Hancock Prospecting. However, no details on the intentions of the new shareholder have been disclosed yet.
Exploring Other Opportunities
While Liontown Resources remains open to potential opportunities, Ottaviano clarifies that there have been no approaches from other interested parties thus far. He further emphasizes that any significant approach would be subject to mandatory disclosure.
Understanding Albemarle’s Decision
Ottaviano acknowledges and understands Albemarle’s withdrawal, considering the circumstances that unfolded in the market. Nevertheless, Liontown Resources remained undeterred and decided to proceed with its funding package, as it was already on the verge of completion.
In conclusion, Liontown Resources, despite the setbacks faced, remains focused on its future prospects. The company’s response to the abandoned takeover reveals resilience and determination as it navigates the ever-evolving lithium industry.
Liontown Secures $1 Billion Financing for Lithium Operation
Liontown, an Australian lithium producer, announced on Thursday a major financing deal worth over AUD 1 billion for its Kathleen Valley lithium operation located in the Australian Outback. The company has secured AUD 760 million in binding debt commitments and plans to raise approximately AUD 376 million in equity. The funding will be used to finance the construction of the lithium operation and also to refinance existing debt.
Expanded Funding Potential
In addition to the debt-and-equity package, Liontown has also introduced a non-underwritten share-purchase plan, which has the potential to raise up to an additional AUD 45 million. This move aims to further strengthen the company’s financial position.
Lithium Supply Agreements
Liontown has already entered into agreements with renowned buyers such as Ford Motor and Tesla to supply them with lithium. Once the production of lithium-rich spodumene concentrate begins next year, Liontown will fulfill these supply commitments. The funding deal ensures that the company has sufficient liquidity until the first phase of production, considering cost inflation pressures and modifications made to the project’s design.
Strong Partnership with Lending Syndicate
The lending syndicate supporting Liontown includes Australia’s four largest banks, namely Commonwealth Bank, Westpac, NAB, and ANZ, in addition to HSBC and Société Générale. Furthermore, Liontown has secured a commitment from Export Finance Australia for an export credit agency facility and is exploring potential support from the Export-Import Bank of the United States at a later stage.
Strategic Planning and Progress
Liontown has diligently worked on securing this financing deal over several months, aligning its efforts alongside Albemarle’s due diligence process. The successful completion of this funding package demonstrates Liontown’s proactive strategic planning and decision-making.
For more information, please contact Rhiannon Hoyle.