Already a subscriber?If the critical minerals sector is going to fill a giant, fossil-fuel-sized hole in Australia’s budget and economy for generations to come, it is going to have to do it without too much reliance on the country’s big four banks.
Each of our big four banks had a nibble, piling into Liontown when Australia’s government was pushing its critical minerals strategy. Months later, we can see the lithium developer is everything the banks are not. Liontown’s story is worth picking over, given the way the government is trying to rebirth a critical minerals sector,to shore up Australia’s mining sector, supply chains, tax revenue and economy.
, only to see that funding shrink and the value of their shares halve. Shareholders don’t get to change their minds when the lithium price tanks, unlike lenders.To its credit, Liontown salvaged a debt deal in March. The $760 million funding packageFast-forward another few months, and having tested all pockets of capital, Liontown is done with the banks.
LG is tipping in $US250 million via five-year convertible notes. Liontown will pay it interest twice a year at SOFR – the secured overnight financing rate in the US, currently about 4.5 per cent – in either cash or shares. The notes are convertible at $1.80 a share, aligning LG with Liontown’s under-water shareholders who tipped into the October raising. LG also extended its offtake agreement by one decade to 15 years.
But surely, both lender and borrower are relieved. That they came together when they did in October, and under the circumstances where Liontown was plugging a short-term funding hole, was soon seen for what it was: a shotgun marriage.
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Source: FinancialReview - 🏆 2. / 90 Read more »