Altech launch equity strategy to expand HPA project in Europe

• Altech Chemicals has executed an agreement to acquire 29 per cent of German company, Youbisheng Green Paper AG (YAG)
• Part of the acquisition involves YAG’s name change to Altech Advanced Materials AG
• The deal gives YAG the non-exclusive right to acquire up to 49 per cent of Altech’s HPA project for US$100 million
• Altech will gain increased exposure to European investors and become a key supplier for the electric vehicle and battery markets

Altech Chemicals has launched a European equity strategy which will allow its investors to acquire a 49 per cent direct interest in the company’s high-purity alumina (HPA) project.

Altech will facilitate this by purchasing a 29 per cent interest in Youbisheng Green Paper AG (YAG), a German company listed on the Frankfurt Stock Exchange. This will cost Altech €2,729,000.

The acquisition of YAG is subject to the satisfaction of various conditions, one of which includes YAG’s name being changed to Altech Advanced Materials AG.

The company was reportedly approached unsolicitedly regarding the deal. Following meetings with German advisors, potential investors and various others, Altech has decided to pursue the opportunity.

Altech’s proposed investment in YAG and the sale to YAG of the right to acquire up to 49 per cent of its HPA project is an important first step for the company’s long term strategy.

This deal is expected to significantly increase the company’s exposure to European investors and to be a key supplier in the growing European electric vehicle (EV) and battery market with 4N HPA (99.99 per cent purity).

The project has attracted significant interest in European countries such as Germany.

This is due to extensive support from German government-owned financial institutions, the awarded contract for constructing the HPA plant and the company’s prominent German shareholder base.

Europe is at the forefront of the EV and battery market.

There is an increasing focus on transitioning vehicles to those powered by lithium-ion batteries. European automotive manufactures have announced plans for new fully electric and/or hybrid vehicle models.

A range of companies have gotten on board however, Europe has recognised risks along the EV supply chain, that is on the current reliance on Asian suppliers. It has outlined the need to secure production facilities and raw materials domestically.

The deal involves Altech executing a subscription, sell-back and sell-back put option deed with YAG which gives YAG the non-exclusive right to acquire up to a 49 per cent interest in Altech’s HPA project for US$100 million.