China: Tianqi Lithium, 200 billion yen debt crisis: Reschedule negotiations in progress
Tianqi Lithium Industries Inc
China’s lithium giant Tianqi is facing a serious debt crisis.
Tensai Feng was stuck in repayment of the “$ 1,884 million syndicated loan, which expired on November 29,” and was in talks with the banking group.
On November 30, the day after the deadline, Tensai Fengsha announced that it had agreed to extend the deadline by one month.
The company and the banking group will continue to negotiate debt reschedules.
Australia and Chile mining interests:
It holds mining interests in Australia and Chile, South America.
The debt crisis was triggered by the company’s large-scale overseas acquisition in December 2018.
It has invested a total of $ 4,066 million (423.4 billion yen) in Chile Lithium SQM.
It acquired 23.77% of SQM’s outstanding shares.
Combined with the previous acquisition, it became the second largest shareholder holding 25.86% of SQM shares.
$ 3.5 Billion Debt from Banks:
To realize this acquisition, Tensai Bank borrowed $ 3.5 billion (about 364.4 billion yen) from banks in China and abroad, led by China CITIC Bank.
Borrowing contract at that time:
Of which
$ 2.3 billion (about 239.5 billion yen) within two years
$ 1.2 billion (about 124.9 billion yen) within 5 years
Each was supposed to be repaid in installments.
Lithium price decline:
After the acquisition of SQM shares was completed, the international market for lithium entered a downward phase due to oversupply.
In addition to the heavy interest burden, Tensai Lithium was forced to make provisions to prepare for the risk of impairment of overseas assets.
Fall to 2019 financial deficit:
In the 2019 financial results, the net loss fell to 5.98 billion yuan (about 94.6 billion yen).
Recently, interest payments have been delayed and it has been in a difficult situation.
China Biz & Tech | Toyo Keizai Online
https://toyokeizai.net/articles/-/394119?display=b
China’s struggling Tianqi Lithium to get $1.4bn from Australian deal
HONG KONG
Tianqi Lithium, a Chinese lithium producer struggling to meet heavy debt repayment obligations,
said it had reached agreement to sell almost half of its interest in the world’s largest mine for the mineral now prized by electric vehicle producers.
The Shenzhen-listed company
is selling a 49% stake in the investment vehicle holding its stake in the mine at Greenbushes, Western Australia for $1.4 billion to IGO Ltd.
Investors
welcomed the news of debt relief, disclosed in a Shenzhen Stock Exchange filing late Tuesday night, pushing up Tianqi’s shares on Wednesday by their daily trading limit of 10% to 32.51 yuan.
The shares ultimately closed up 5.9% at 31.30 yuan.
Nikkei Asia
Tianqi Lithium Corp