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Altech Advanced Materials AG
Ansprechpartner: Hansjörg Plaggemars
Tel.: +49 6221 64924-0
E-Mail: info@altechadvancedmaterials.com

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pta20201030024
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Altech Advanced Materials AG: ALTECH AUSTRALIA TO COMMENCE THE LISTED GREEN BOND OFFERING PROCESS IN LONDON

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Frankfurt am Main (pta024/30.10.2020/12:00) - Highlights:
* Green bond issue of USD 144 million approved by Altech Chemicals Limited Supervisory Board
* Structure, scope and implementation program in London for a listed green bond (GREEN BOND) have been agreed
* The implementation of the Green Bond has now been initiated

Altech Advanced Materials AG ("AAM") (30.10.2020/15:00; FRA: AMA1) is pleased to announce that Altech Chemicals Limited ("Altech") has been granted a further debt financing option (see corporate news of 20.08.2020), Altech Chemicals Limited ("Altech") has received a final implementation program for a USUSD144 million listed green bond issue (Bond Structure and Execution Plan) from retained advisors Bluemount Capital (WA) Pty Ltd (Bluemount) and London based partner Bedford Row Capital (Bedford Row). Altech's board of directors has already approved the proposed program and implementation of the concept for the bond offering has begun.

Background:
Despite the negative impact that the COVID-19 pandemic has had on global markets since March 2020, AAM and Altech has continued to focus on bringing about the close of project financing for Altech Australia's Malaysian HPA project, whilst ensuring that stage 2 early works construction activities were completed at the HPA plant site. In addition to the USUSD190 million senior project finance loan facility available from German government owned KfW IPEX-Bank, Altech and AAM together continue to pursue multiple additional subordinated debt funding options. The use of bonds to secure a secondary level of project finance debt could be an alternative to bank mezzanine debt.

An advantage of bonds over bank finance is that only the interest (coupon) is paid to bond holders during the term, whereas mezzanine bank debt requires the payment both principal and interest over the loan term. Bonds are typically re-financed at the end of the term, and in the case of start-up projects such as Altech Australia's HPA project, the coupon (interest rate) payable on re-finance would expect to be lower because project construction and commissioning risk is removed, and an operating track-record for the project would be in place.

Structuring concept for Green Bond:
A Special Purpose Vehicle (SPV Co.) would be incorporated and managed by Bedford Row Capital (or its nominee) as the proposed bond Issuer From a USD 144 million issue, USD 44 million would be retained by the SPV to service bond coupon (interest) payments during the period of Altech's HPA plant's construction and commissioning. The USD 100 million balance of proceeds is lent by the SPV Co. to Altech Australia's Malaysian subsidiary (Altech Chemicals Sdn. Bhd.), to part-fund HPA plant construction costs and/or for working capital. It is envisaged that the bond will be for an initial 5-year term, and typical of this type of funding the bond would likely be re-financed at a lower coupon (interest rate) at the end of the term. The SPV Co. would have second lien security behind senior lender KfW IPEX-Bank.

The execution program commences with 3-month preparation phase, where legal documentation, structures, teasers, draft investment memorandum and comprehensive corporate presentation packs will be developed and then distributed to prospective subscribers. This is followed by the opening of a data room for a bookbuild phase, which will only initiate upon positive "soft soundings" during the preparation phase and will optimally be conducted in a period of positive overall market sentiment.

The final phase is execution, when commitments are remitted, and bond proceeds formally deposited with the SPV (Closing). Application for listing the bonds on the Frankfurt Stock Exchange will be made following the Closing.

The preparatory phase of the implementation program is expected to run until the second quarter of 2021 (due to the Christmas/New Year period), after which it is expecting to initiate the bookbuild.

The Management Board

About Altech Advanced Materials AG:
Altech Advanced Materials AG ("AAM") currently plans to acquire up to 49% of Altech Chemicals Australia PTY LTD ("Altech Australia"), a subsidiary of Altech Chemicals, for up to USD 100 million. AAM is currently implementing its capital raising strategy to finance this investment.

Altech Australia is currently building a production plant for high-purity alumina (99.99%; 4N HPA) for 4,500 tons p.a. in Malaysia and also has its own deposit for the extraction of the main raw material kaolin. 4N HPA is required for the production of LED lights and as a separator for lithium-ion batteries, which are needed for electric vehicles and smartphones, for example. According to market studies, demand for 4N HPA is expected to grow by an average of 30% p.a. until 2028. Altech Australia's proprietary process allows the production of HPA as a cost leader, as HPA can be extracted directly from kaolin. This allows a production without the use of energy-intensive aluminium. The acceptance of the production volume for the first 10 years has been secured by an off-take agreement with Mitsubishi Australia and the production capacity and quality is guaranteed by the German plant engineering company SMS group GmbH from Düsseldorf, which has also agreed to provide equity capital for the Altech HPA project.

The overall project has a remaining investment volume of around USD 390 million, of which KfW-IPEX Bank has already committed USD 190 million under certain conditions and SMS group GmbH has already entered into an equity commitment of USD 10 million. Altech Chemicals Limited is currently in discussions with Macquarie Bank regarding the provision of USD 90 million mezzanine capital. The remaining USD 100 million is to be provided by AAM.

(end)
emitter: Altech Advanced Materials AG
Ziegelhäuser Landstraße 3
69120 Heidelberg
Germany
contact person: Hansjörg Plaggemars
phone: +49 6221 64924-0
e-mail: info@altechadvancedmaterials.com
website: www.altechadvancedmaterials.com
stock exchanges: regulated market in Frankfurt; free market in Dusseldorf; open market in Berlin
ISIN(s): DE000A2LQUJ6 (share)
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