- Explorer IGO (IGO) has entered into a binding agreement with Tianqi Lithium Energy to acquire 49 per cent of the lithium giant’s Australian stake
- IGO will acquire a non-controlling interest in Tianqi Lithium Energy Australia through a subscription of new shares in Lithium HoldCo for $1.9 billion
- Once the transaction is finalised, Lithium HoldCo which will become the exclusive vehicle for any future lithium related investments outside of China for Tianqi and IGO
- The deal will give IGO a 24.99 per cent indirect interest in Western Australia’s Greenbushes Lithium Mining and Processing Operation and a 49 per cent indirect interest in the Kwinana Lithium Hydroxide Plant
- IGO intends to fund the purchase through a combination of $1.1 billion new debt facilities, a $766 million capital raise and cash reserves
- IGO is currently in a trading halt amid announcements relating to the acquisition and equity raise and last traded at $5.10
Explorer IGO (IGO) has entered into a binding agreement with Tianqi Lithium Energy to acquire 49 per cent of the lithium giant’s Australian stake.
IGO will acquire a non-controlling interest in Tianqi Lithium Energy Australia through a subscription of new shares in Lithium HoldCo for $1.9 billion.
The deal will give IGO a 24.99 per cent indirect interest in Western Australia’s Greenbushes Lithium Mining and Processing Operation and a 49 per cent indirect interest in the Kwinana Lithium Hydroxide Plant.
IGO intends to fund the purchase through a combination of $1.1 billion new debt facilities, the $766 million capital raise and cash reserves.
Tianqi will hold the remaining 51 per cent of Lithium HoldCo which will become the exclusive vehicle for any future lithium related investments outside of China for Tianqi and IGO once the transaction is finalised.
IGO has agreed to pay a deposit of US$70 million (around A$94.01 million) to Tianqi which is payable if IGO is unable to fund the purchase price.
Conversely, a break fee of US$70 million is payable by Tianqi to IGO if certain conditions precedent are not satisfied.
Equity raise
The acquisition will be partially funded by an equity raising of new fully paid ordinary IGO shares to raise up to $766 million at an issue price of $4.60
per share.
Of the $766 million, $446 million will be raised through the issue of 97 million new IGO shares at $4.60.
$256 million will stem from a fully underwritten one for 8.5 non-renounceable institutional offer. The remaining funds will be raised via a retail component, expected to open December 15.
IGO is currently in a trading halt amid announcements relating to the acquisition and equity raise and last traded at $5.10.