Altech to launch USD$144m green bond to investors as Malaysian HPA plan navigates headwinds

Mon 08 Aug 22, 4:02pm (AEST)
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Key Points

  • Altech’s currently nested Malaysian High Purity Alumina (HPA) remains on track to positive financial decision
  • Equity market headwinds undesirable but not enough to knock progress completely off-course

Altech (ASX:ATC) investors wondering where the company is at with its Malaysian HPA plans have been reassured today with Altech noting the project receives ongoing commitments from its two largest creditors. 

Altech will proceed to launch a USD$144m green bond offering with the help of UK firm Bedford Row Capital and Perth’s Bluemount Capital (Perth as in Australia, and not Scotland.) 

USD$100M in project level equity will also be sourced by Altech moving the project forward.

Total funding includes:

  • US$190M loan from Kfw-IPEX (a German bank)

  • US$144m from green bonds (US$100m for the project; and 2.5y coupon payments of $44m)

  • US$100M project equity

What’s the hold up? 

Ongoing headwinds borne from movements in equity markets are proving challenging for the development of the project, but with major creditors confirming ongoing support, the question becomes one of ‘when,’ and not ‘if.’ 

Currently, Altech is battling supply chain disruptions caused by covid, and then the Russian-Ukraine war. 

On top of this, it’s also trekking uphill against a depressed equity market, inflationary environments in all jurisdictions, and greatly reduced investor sentiment, mostly due to the fact most of the world will see at least a small recession. 

Don't forget Mitsubishi

Aside from creditors staying onboard, there’s one other big headline for the HPA project: Mitsubishi has executed a 10 year offtake agreement with Altech to receive the alumina, for use in batteries, once production goes live. 

Altech’s HPA project has been formally assessed as ‘green’ by the independent Centre of International Climate and Environmental Research (CISERO) based in Norway.

That ‘green’ label does not just come from the fact Altech is seeking to produce metals for use in metals, thereby driving electrification, but also that the company believes it can make the HPA itself using -41% less energy than competitors. 

Malaysia has been seeing bad weather in the last week; but Altech notes its existing infrastructure on-site at the Tanjung Langsat Industrial Complex remains ready to go. 

Altech's three month charts show a revival in interest following a mid-June glut
Altech's three month charts show a revival in interest following a mid-June glut
Disclaimer: Market Index helps small-cap ASX listed companies connect with Australian investors through clear and concise articles on key developments. Altech was a client at the time of publishing. All coverage contains factual information only and should not be interpreted as an opinion or financial advice.


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Written By

Jonathon Davidson

Finance Writer

Jonathon is a journalism graduate and avid market watcher with exposure to governance, NGO and mining environments. He was most recently hired as an oil and gas specialist for a trade publication.

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