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REFILE-Tianqi Lithium warns of $1.9 bln default as loan repayment date nears

Published 29/09/2020, 09:37 pm
SQMA
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601998
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002466
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995C-LTCB
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* Embattled lithium producer has to pay banks $1.9 bln by late Nov

* Application for adjustment to loan terms still under review

* Tianqi says talks with potential strategic investors are ongoing

By Tom Daly

Sept 29 (Reuters) - China's Tianqi Lithium Corp 002466.SZ said on Tuesday it may not be able to make a $1.88 billion repayment on a loan taken out to buy a stake in Chilean miner Sociedad Minera y Quimica de Chile SQMA.SN (SQM) in 2018 as the due date fast approaches.

The warning, delivered in a filing to the Shenzhen Stock Exchange, comes as prices for lithium AM-995C-LTCB remain depressed just two months before the repayment on the $3.5 billion loan - taken out with a syndicate of banks led by China Citic Bank 601998.SS - is due in late November.

Tianqi, one of the world's biggest producers of lithium chemicals is used in batteries for electric vehicles, admitted a default would impact its daily operations and said its assets and bank accounts could be frozen as a result.

"Although the company has formally submitted an application to the syndicate to adjust the loan term structure, it is currently under review," it said it the filing. Citic Bank declined to comment.

Tianqi, which has posted a net loss for four consecutive quarters and parted company with its president last month, said its cash flow and liquidity situation had not substantially improved. company is in "urgent" talks with potential strategic investors but no legally binding agreements have been signed so far, it added.

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Tianqi did manage to secure an extra credit line of up to $100 million from China Citic Bank earlier this year, mostly to settle overdue payment for lithium concentrate cargoes, but said it had suspended some interest payments on the $3.5 billion loan.

Unpaid interest so far amounts to 464 million yuan ($68 million), it said.

($1 = 6.8180 Chinese yuan renminbi)

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