* Lithium producer Tianqi has to pay $1.9 bln by late Nov
* Daiwa Capital Markets says Tianqi possible turnaround play
* Tianqi in ongoing talks with potential strategic investors (Adds analyst comment, paragraphs 8-9)
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 due in November on a loan taken out to buy a stake in Sociedad Minera y Quimica de Chile SQMA.SN (SQM) in 2018.
The warning in a Shenzhen Stock Exchange filing, comes as lithium AM-995C-LTCB prices remain depressed just two months before the repayment on the loan, with a syndicate led by China Citic Bank 601998.SS , is due. is a possibility of default due to a failure to successfully extend the loan or the company being unable to pay on time and in full," Tianqi, one of the biggest producers of lithium chemicals used in batteries for electric vehicles, said.
Tianqi said its production and operations could face major risks if its liquidity situation does not improve soon, with the coronavirus pandemic exacerbating its losses.
China Citic Bank declined to comment.
Tianqi, which has posted a net loss for four consecutive quarters, also said in the filing that it was in "urgent" talks with potential strategic investors but that no legally binding agreements had so far been signed. managed 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, but said it had suspended some interest payments on the $3.5 billion loan，with unpaid interest totalling 464 million yuan ($68 million).
Analysts at Daiwa Capital Markets said in a note after the filing they saw Tianqi, whose share price is down 32.6% year-to-date, as a turnaround play when the restructuring with a strategic investor or investors is finalised.
"That said ... we see downside for investing in Tianqi being highly unprotected as the company would be on the brink of bankruptcy if it fails to repay or refinance" the $1.9 billion by November, they added. ($1 = 6.8180 Chinese yuan renminbi)