PERTH (miningweekly.com) – ASX-listed Galaxy Resources has postponed the $230-million sale of its Jiangsu battery-grade lithium carbonate plant to China’s Sichuan Tianqi Lithium Industries, preferring to wait for the China Securities Regulatory Commission (CSRC) to change its policy, rather than facing red tape.

The company told shareholders on Monday that the China State Council had issued a memorandum outlining the opinions of the State Council on optimising the regulatory regime of mergers and acquisitions. It was thought that under the new regulation, the CSRC approval procedure would no longer be required for what was currently deemed very substantial acquisitions (VSAs).

Under the current regime, a transaction the size of the Jiangsu agreement would be subject to “very rigorous” independent review, and could undergo a typically long and protracted and complicated approvals process, Galaxy said.

The company noted that the adoption of the new changes would mean that the Jiangsu sale would no longer be subject to preapproval by the CSRC, and would not be required to fulfil the current complicated process within the CSRC rules.

In the expectation that these changes would be adopted, Galaxy and Tianqi have taken the view that the overall timetable of the sales transaction could be shortened if the companies waited for the changes to be enacted.

“The company remains confident that based on the timing between the completion of the public consultation and formal enactment of law changes for precedents in China, that waiting for the change to the CSRC approval process remains the quickest way to achieve final closing,” Galaxy told shareholders.

In the event that the rule change proved protracted, the VSA criteria of the transaction would fall away once Tianqi issued its audited accounts for the year ended December, as the relative size of the Jiangsu project to Tianqi would no longer trigger the financial ratio threshold that required CSRC preapproval.

This was because Tianqi completed a substantial equity raise during the year under review, and consolidated a large asset purchase, meaning its size would be above the VSA threshold at year-end.

The transaction was still subject to Tianqi shareholder approval, as well as the approval of provincial-level governments and departments.

All necessary Australian regulatory approvals have already been completed.