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Galaxy secures funding as it awaits Jiangsu sale

Galaxy secures funding as it awaits Jiangsu sale

Photo by Bloomberg

11th August 2014

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – ASX-listed Galaxy Resources has drawn down the first $15-million tranche of a $130-million funding facility made available under the divestment agreement of its Jiangsu lithium carbonate plant, in China.

In April this year, Galaxy signed a binding share purchase agreement with China’s Sichuan Tianqi Lithium Industries to divest of its Jiangsu battery-grade lithium carbonate plant in a deal worth $230-million.

Under the terms of the transaction, Galaxy would sell its entire share in Hong Kong subsidiary Galaxy Lithium International, which owns the Jiangsu plant, in exchange for $122-million in cash and Tianqi assuming the entire $108-million of Chinese bank debt owed by Galaxy.

The $30-million facility was being made available prior to the completion of the Jiangsu sale, owing to the longer-than-anticipated time required to obtain the necessary regulatory approvals in China.

The funding facility would be repaid from the consideration received once the sale process has been completed.

Galaxy told shareholders on Monday that all outstanding approvals for the divestment would likely be completed in October this year.

Edited by Creamer Media Reporter

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