| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Bond Market News

Tianqi Lithium’s Controlling Shareholder to Get $2.5 Billion via Share Sale

February 1, 2021

Tianqi Lithium, one of the world’s largest producers of lithium chemicals used in electric vehicle batteries said that an unnamed entity would invest up to CNY 16bn ($2.5bn) in its controlling shareholder. This would help the Chinese company reduce its debt. This comes after Tianqi in December got a $1.4bn lifeline from Aussie Miner IGO. The company said that on December 22, it signed a “non-binding and non-exclusive memorandum” on a potential equity transfer with a party that plans to invest CNY 10-16bn in Chengdu Tianqi Industry Group, Tianqi Lithium’s controlling shareholder that has a 30% stake. The Shenzhen exchange had called for an explanation on why Tianqi announced a CNY 15.9bn ($2.3bn) private placement of shares to Chengdu on January 15, only to cancel it two days later. This had brought in speculation that Tianqi was due to bring a strategic investor. Daiwa Capital Markets said that it was almost impossible for Tianqi to afford such an investment alone and that a strategic investment in its controlling shareholder was more likely. The Lithium miner has CNY 1.295bn ($200mn) in cash with short-term debt due within a year at CNY 3bn ($456mn) and long term debt at CNY 15bn ($2.2bn), as per its September report. Moody’s downgraded Tianqi Lithium to Caa2 after it signed a loan extension agreement with its banks for a $1.9bn term loan facility due November 29 – this constituted a default as per Moody’s definition. Ever since, Tianqi’s $300mn 3.75% dollar bonds due 2022 which were down 40% until December last year to distressed levels of 39.05, have more than doubled, currently trading at 87, yielding 11.9% on the secondary markets.

For the full story, click here

Related Posts:
Registered office: 8 Marina View, #43-062 Asia Square Tower 1, Singapore 018960
© Copyright BondbloX 2024, All Rights Reserved.