European Lithium Ltd (ASX:EUR, OTCQB:EULIF) has made strong progress on the business combination agreement with Sizzle Acquisition Corp, a NASDAQ-listed special purpose acquisition company, which will merge with EUR Austria to form a lithium exploration and development company named ‘Critical Metals Corp.’.
What this means is that the Wolfberg Lithium Project is set to list on the Nasdaq under the Critical Metals Corp banner. As we have previously reported, for EUR this is the path to a quicker and easier run to listing on the Nasdaq than would have occurred had it listed itself.
The implied equity value of the consideration to be paid for Wolfsberg under the transaction is US$750 million, which represents a significant increase to the current market capitalisation of EUR of about A$112 million as a whole.
Following the transaction, EUR will be issued US$750 million worth of ordinary shares in Critical Metals, which represents an approximate 80% ownership interest in the combined entity.
The transaction is expected to provide the combined group with approximately US$159 million in capital before expenses to fund the activities of Critical Metals.
Moving forward, a Form F-4 registration statement was filed today with the US Securities and Exchange Commission (SEC) in connection with the merger.
Important step
Commenting on the filing of the F-4, EUR chairman Tony Sage said: “We are pleased to reach this important step in the progress of the Transaction and plans to list Critical Metals Corp on Nasdaq.
“Through the business combination with Sizzle, Critical Metals Corp expect to access substantial opportunities available in the U.S. market as they support the clean energy transition.”
Merger summary
Under the business combination agreement, European Lithium AT (Investments) Ltd and its subsidiaries, ECM Lithium AT GmbH and ECM Lithium AT Operating GmbH (collectively EUR Austria), which will hold Wolfsberg and a 20% interest in the Weinebene and Eastern Alps Projects before the closing, will merge with Sizzle to form Critical Metals Corp.
The transaction is expected to provide the combined group with approximately US$159 million in capital before expenses to fund the activities of Critical Metals Corp.
In consideration for the transaction, EUR will be issued US$750 million worth of ordinary shares in Critical Metals at a deemed issue price of US$10.20 per share, being approximately the same price at which the existing stockholders of Sizzle can redeem their shares and equal to an ownership interest of approximately 80%.
In addition, EUR can also earn up to an additional 10% of the ordinary shares in Critical Metals Corp, subject to the ordinary shares of Critical Metals trading above US$15.00 and US$20.00 for any 20 trading days within any 30-trading day period in the five years following closing.