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UPDATE 1-Tianqi Lithium says weighing asset sales, strategic investors to slice debt

Published 17/04/2020, 11:23 pm
SQMA
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002466
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99C-LTCB
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* Tianqi responds to report it wants to sell stake in Australia JV

* Says considering sales, strategic investors but nothing signed

* Liquidity pressure has increased as lithium prices fall -filing (Adds detail from filing, background)

By Tom Daly

BEIJING, April 17 (Reuters) - Tianqi Lithium Corp 002466.SZ , one of the world's top lithium producers, said on Friday it was exploring selling equity and assets, as well as bringing in strategic investors to address liquidity problems but that no agreements had yet been signed.

The Chinese company, which is set to post heavy losses in both 2019 and the first quarter of 2020 amid low lithium prices, made the comments in a filing to the Shenzhen Stock Exchange after reports it was looking to sell a stake in its Australian joint venture Talison Lithium to cut debt. Tianqi has been struggling to repay loans taken out to finance its high-profile $4.1 billion acquisition of nearly quarter of Chilean miner SQM SQMA.SN - agreed in 2018 when prices for lithium, a key ingredient in batteries for electric vehicles, were much higher.

The company said its "liquidity pressure increased" in the fourth quarter of 2019 due to falling lithium prices AM-99C-LTCB , which are currently around two-thirds lower than they were two years ago, as well as rising financial expenses.

To address this, Tianqi is looking at the feasibility of various financing tools, including "the introduction of domestic and foreign strategic investors (and) the sale of assets and equity," the filing said, without specifying what the company was prepared to divest.

Talison Lithium - in which Tianqi partners U.S.-based Albemarle Corp ALB.N - operates the Greenbushes lithium mine in Western Australia, as well as the Kwinana processing plant which is supposed to produce battery-grade lithium hydroxide but has had its commissioning postponed. NL4N2BF0DE

Tianqi said it had not yet signed any legally binding agreement to sell assets or bring in a strategic investor.

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