Perth, Australia, Mar 25, 2020 - (ABN Newswire) - Altech Chemicals Limited (ASX:ATC.AX - News) (HAM:A3Y.F - News) is pleased to provide a corporate update and details about various activities that remain ongoing, in support of its previously announced European based initiatives (refer ASX Announcement 27 February 2020).
- Balance of Stage 2 HPA plant site construction work nearing completion
- Site works currently suspended due to Malaysia's Covid-19 movement control order
- European initiatives continue, to position HPA project for post Covid-19
At the Company's high purity alumina (HPA) plant site in Malaysia, almost all of the outstanding Stage 2 site construction work (electrical substation) has been completed. No work additional to Stage 2 is currently planned. The minor remaining work on the substation consists of internal fit out (most fit out has been completed), sewage and drainage work. Work at the HPA plant site is currently suspended due to the Malaysian government's imposition of a movement control order in response to the outbreak of Covid-19, the order is currently in effect until 31 March 2020. The HPA site is fully fenced and has 24-hour security (both at the industrial complex entrance and at the plant site) as the movement of security personnel is exempt from the control order. It is expected that site work can re-commence easily when the control order is lifted.
In relation to the global Covid-19 pandemic, in addition to supporting the welfare of all its employees, the Company is only proceeding with discretionary expenditure that will assist to position it to continue to progress its HPA project once financial markets and the global economy stabilise.
On the basis that it is likely that most able governments, but particularly those in Europe, will make available significant (likely unprecedented) economic stimulus once stability returns to financial markets and the global economy, the Company is continuing with its European based activities to best position it for this situation. The activities include:
1. Promotion of Altech and its HPA project: Mr Uwe Ahrens, Altech alternate director and member of the management board of Altech Advanced Materials AG (AAM), is continuing with his German based work to promote Altech's HPA product and to assist AAM with its planned rights issue and share placement. Although face-to-face meetings are currently being limited by the Covid-19 situation, teleconference and internet facilitated meetings are continuing.
2. Altech Advance Materials AG: AAM has advised Altech that it remains on track for prospectus approval from BaFin (German Federal Financial Supervisory Authority) by mid-April 2020. The rights-issue shall commence upon prospectus approval, but timing may be altered in light of the pre-vailing Covid-19 situation.
AAM continues to work with the Swiss international Investment Bank that is appointed as placement agent in relation to the issuance of equity or other equity instruments (securities) by AAM via private placement, which remains scheduled to follow the AAM rights offer.
3. Independent Assessment of Altech's HPA project green credentials: As announced on 18 March 2020, AAM has appointed the Centre of International Climate and Environmental Research (CICERO) associated with the University of Oslo (Norway), to complete an independent determination of Altech's HPA project green credentials. This work is continuing and is important for positioning the project for a more stable global economy and broadening access to financial and equity markets, in particular "green" funds and lenders.
4. Project Finance: Altech has not been advised by either German government owned KfW IPEX-Bank, or by Macquarie bank of any changes to their respective support for Company's HPA project.
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About Altech Chemicals Ltd:
HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.
Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.
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