Chinese company Tianqi Lithium gets one-month reprieve on $ 1.9 billion repayment

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A man works at a lithium battery factory in Huaibei, central China’s Anhui Province, Saturday, November 14, 2020.

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From China Tianqi Lithium said Monday it signed a letter with a syndicate of banks to extend by one month the due date of $ 1.884 billion in title loans that were due to be repaid at the end of November.

Tianqi, one of the world’s leading producers of lithium chemicals used in electric vehicle batteries, has repeatedly said its operations could be severely affected if it does not return the money, which was used to acquire a 23.8% stake in a Chilean miner. SQM in 2018, on the due date.

The last minute stay gives the company and its lenders, led by China Citic Bank, until Dec. 28 to sign an amended loan agreement, Tianqi said in a filing at the Shenzhen Stock Exchange. Otherwise, Tianqi will have to refund the money on that date.

The two sides are “actively negotiating the key terms” of the amended loan agreement, he said.

If the conditions of the extension letter cannot be met, however, the repayment period will not be extended at all, the filing said, triggering a default. Tianqi also has to repay the unpaid interest on the loans by December 10.

Daiwa Capital Markets said in a note that it sees the extension as a time-saver for Tianqi.

“We expect Tianqi to reveal a solution for the repayment of the annexation loan within a month, potentially a strategic investment or sale of Australian assets amid a rebound in the price of lithium,” he said. -he declares.

Tianqi, alongside Albemarle Corp, jointly operates the Greenbushes lithium mine in Australia, where it also owns the Kwinana processing plant.

China Citic Bank did not immediately respond to an after-hours request for comment.

Tianqi paid $ 4.1 billion for SQM’s stake, taking $ 3.5 billion in debt to fund the acquisition.

But lithium carbonate prices in China have fallen by about 70% since entering into the deal, amid oversupply, leaving Tianqi in the red and unable to repay its loans.

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