Altech Chemicals Ltd (ASX:ATC) has received strong support from German engineering firm SMS group GmbH, which has been issued shares worth US$100,000 as an initial share subscription.
The share subscription agreement was part of SMS’ appointment in May 2017 as the engineering, procurement and construction (EPC) contractor for Altech’s Malaysian high purity alumina (HPA) plant.
Iggy Tan, managing director, commented: “It is not common for an EPC contractor to be demonstrating this type of upfront support.
“In addition, SMS’s commitment for additional equity or subordinated debt support at project financial close is also an outstanding indication of its support and confidence of this project.”
Key engineering and investment partner
SMS is a large privately owned German engineering company with an annual turnover of circa €3.3 billion.
SMS builds turnkey solutions based on innovative plant technology, complete with buildings, infrastructure and auxiliary equipment for processing plants such as Altech’s proposed HPA plant.
SMS was founded in 1871 and is based in Düsseldorf, Germany with office locations worldwide.
The company has recent EPC contract experience in Malaysia, having successfully completed the Sakura smelting project, in Sarawak.
It is worth noting that SMS is among the top three users of German government export credit (ECA) facility.
Endorsement of the Malaysian project
This initial share subscription by SMS is a sound endorsement of Altech’s HPA plant, given SMS’s prior experience with the kaolin-HPA hydrogen chloride processing technique.
This process will be used by Altech in its proposed Malaysian HPA plant.
For the share subscription, Altech issued 1,162,979 fully paid ordinary shares to SMS at $0.11 per share.
This is the same price paid by shareholders that participated in the company’s recently completed share purchase plan.
The initial upfront investment in Altech is a real demonstration of SMS’s confidence in the process, project and the company.