Albemarle strikes lithium deal with Lithium Power International
PERTH (miningweekly.com) – ASX-listed Lithium Power International has struck a A$30-million deal with critical minerals major Albemarle to divest of its wholly-owned Australian subsidiary, Western Lithium.
The transaction would see Albemarle acquire full ownership of Western Lithium, which Lithium Power has been in the process of spinning off into a separate company with the intention to list on the ASX.
Lithium Power International in January last year announced plans to spin out its hard rock lithium assets in Western Australia, and to list these assets in a separate vehicle on the ASX.
While the spin-off and new listing of Western Lithium are well advanced, the subdued capital market conditions and the subsequent offer from Albemarle have swayed the Lithium Power International board to accept the offer, saying it will provide better value and less risk to shareholders than continuing with the listing.
“This agreement with Albemarle provides Lithium Power International with immediate value for our Western Lithium subsidiary company. Despite the significant progress we had made towards an initial public offering (IPO) of Western Lithium in the past months, this asset realisation will provide a significant uplift to the pre-money valuation of our Western Australia asset portfolio,” said Lithium Power International CEO Cristobal Garcia-Huidobro.
“It will add significant cash to the company’s balance sheet and is non-dilutionary to Lithium Power International shareholders, as the financing process of our flagship Maricunga project in Chile continues moving forward."
On completion of the sale, Lithium Power International will receive A$29-million in cash, subject to customary price adjustments, with the balance of payment to be received if certain tenement applications are granted within 18 months of completion.
The transaction is not subject to any other conditions precedent and would likely become effective around July 3.
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