Lithium Australia (ASX:LIT) has confirmed its disposal of all 7.6M remaining shares in Charger Metals (ASX:CHR) it owns to Core Lithium (ASX:CXO).
In exchange, LIT is snapping up CXO shares. Lithium Australia will receive 0.8 CXO shares for every share of Charger it disposes to Core in the exchange. This, Lithium Australia says, will improve its own liquidity.
Lithium Australia framed the deal as a way to extract value from non-core assets. Core Lithium, in its announcement on the matter, described a strategic investment into Charger Metals.
All companies have suffered through a world with plummeting lithium prices. Core Lithium’s fall from former glory has been the most pronounced.
For $500K, Lithium Australia also sold its 30% stake in the Bynoe project to Core Lithium. That project, which Charger Metals and Lithium Plus (ASX:LPM) both have their hands on, is located in the Northern Territory.
Lithium Australia retains the option to “receive [a] takeover premium” if Charger Metals is acquired within the next 9 months for more than “the Initial Valuation.”
“If Charger is acquired within this period, Lithium Australia retains the option to gain the difference between the Initial Ratio and the Control Valuation by buying back the 7.6 million Charger Metals shares from Core Lithium … and subsequently selling these shares” LIT wrote on Monday.
In “some circumstances,” Core would have to pay the difference to LIT.
Lithium Australia, it’s worth noting, have effectively swapped out one shareholding worth 8cps for another worth 8cps. Core is more liquid than Charger – implying Lithium Australia doesn’t want to be left holding a bag.
CXO last traded at 8.3cps; CHR at 8cps; LIT at 2cps.