Altech Chemicals Ltd (ASX:ATC) has signed an indicative non-binding term sheet for a US$60 million stream finance facility for its proposed high purity alumina (HPA) project In Malaysia.
The stream finance facility has been signed with a US based global alternative investment group with US$4.5 billion under management.
A stream finance facility is a structured alternative financing product whereby the facility provider agrees to advance a facility amount in exchange for a percentage of future gross sales.
Earlier this year, Altech executed the final terms for a US$190 million senior debt package with German government-owned KfW IPEX-Bank.
READ: Altech Chemicals finalises US$190 million finance package for Alumina plant
Additionally, the company signed an indicative non-binding mezzanine debt term sheet worth US$90 million last month with a global investment bank.
READ: Altech Chemicals receives US$120 million debt term sheet
Notably, combining the new streaming facility with senior debt and mezzanine debt would provide total project finance of US$340 million, which the company is considering.
The new streaming facility contemplates a US$60 million advance, with funds able to be applied to the development, construction and working capital requirements of the project.
It remains subject to additional due diligence, the agreement of binding terms and to various bank, regulatory and board approvals.
READ: Altech Chemicals eyes growing demand for high purity alumina from lithium-ion battery sector
The company aims to be a vertically integrated producer of HPA as it plans to feed its proposed HPA plant in Malaysia using its kaolin mine in Western Australia.
Altech is forecasting a faster than expected migration by lithium-ion battery manufacturers to the use of HPA coated battery separators.
Altech managing director Iggy Tan said: “The company is extremely pleased with the interest that is being shown from a variety of financiers in our HPA project, as is demonstrated by the term sheets received to date.
“We remain committed to pursuing an optimal financing structure for the project, and will continue to keep shareholders informed of developments”.