PERTH (miningweekly.com) – Lithium miner Pilbara Minerals has entered into a share sale agreement with the administrators of fellow listed Altura Mining to gain ownership of Altura’s Pilgangoora lithium project, in Western Australia, for $175-million.
The ASX-listed Pilbara Minerals has also proposed a deed of company arrangement (DOCA) under which it would contribute A$6-million to a DOCA fund, in support of entitlements owing to Altura employees who have been made redundant after the Pilgangoora project was placed on care and maintenance.
Altura in October this year appointed voluntary administrators to conduct an urgent assessment of the company’s financial position, with the intention of transitioning the lithium operations into care and maintenance in the coming weeks in order to preserve near-term cashflow.
Pilbara Minerals subsequently announced that it had entered into an implementation deed with the senior secured loan noteholders of Altura, providing a path to potentially acquire the Altura lithium project through the purchase of the shares in Altura Lithium Operations (ALO) for $175-million, subject to completion of the receivership process.
Pilbara said on Tuesday that the signing of the share sale agreement and the submission of the DOCA proposal followed a formal process by the receivers to market Altura’s Pilgangoora project and the company’s other assets for sale and recapitalization opportunities.
Pilbara’s acquisition of the project is subject to a number of conditions precedent, including creditors approving the DOCA proposal and completion after a proposed A$240-million capital raise by Pilbara, which was announced to the market in late October.
Pilbara Minerals will complete a A$119-million cornerstone placement to AustralianSuper and will then launch a A$121-million accelerated non-renounceable entitlement offer, which will be fully underwritten by Macquarie Capital.
The equity raising will take place at a fixed price of 36c a share, representing an 11.4% discount to the five-day volume weighted average price of Pilbara shares prior to the announcement of a conditional agreement.
Altura creditors are expected to meet on or before December 11 to vote on Pilbara’s DOCA proposal, while the senior secured loan noteholders have agreed to vote in favour of the proposal.
If the DOCA is not approved, Pilbara and the loan noteholders have agreed to proceed with Pilbara’s acquisition of the Altura project by changing from a share sale agreement to an asset sale agreement with the receiver.