PERTH, Australia, July 28, 2013 /CNW Telbec/ -
• A$5 million subordinated short term loan facility agreed with
lending consortium with a view to convert to equity
• Deutsche Bank agrees to subscribe to Entitlement Offer to maintain
• Current acceptances, conversion of loan facility, and Deutsche
Bank subscription will exceed the minimum required raising under the
Galaxy Resources Ltd (ASX: GXY) ("Galaxy" or "the Company") is pleased to announce that major shareholder commitments, conversion of
a A$5 million subordinated short term loan facility and other
acceptances to its current Entitlement Offer ("Entitlement Offer") will result in the Entitlement Offer minimum required raising of A$12
million being exceeded.
Deutsche Bank A.G, Sydney Branch has advised Galaxy it will commit to
maintaining its position by subscribing for its circa 7.8% share of the
Entitlement Offer and shortfall placement.
In addition, Galaxy has entered into an A$5 million subordinated short
term loan facility ("Facility") with a lending consortium ("Consortium"). The Consortium is made up of existing, largely European-based
institutional shareholders of Galaxy and was arranged by Galaxy's
Special Management Committee.
The short term loan facility funds have been made available to provide
additional near term funding for general corporate purposes.
Under the terms of the Facility, the Consortium has an option to convert
the loan in whole or in part into Galaxy equity by:
taking up shares as part of any shortfall in the Company's current
Entitlement Offer; or;
pursuant to Galaxy's 15% share placement capacity under the ASX Listing
Rules. In the event the Company does not have sufficient placement
capacity, conversion will be subject to Galaxy shareholder approval.
Assuming conversion, these funds represent a substantial commitment to
the current 1 for 1 pro-rata non-renounceable offer at A$0.08 per share
to raise a minimum of A$12.0 million and up to A$46.7 million (before
Along with applications to hand, the minimum subscription amount under
the Entitlement Offer will be exceeded.
Under the Facility's terms and conditions, the Consortium also has an
additional option to acquire 25 million shares of the Company at A$0.08
per share. Fees, expenses and interest payable under the Facility are
typical of a transaction of this nature.
The Facility has a maturity date of three months from first utilisation
of the previously-announced A$5 million bridging loan with Deutsche
Bank A. G, Sydney branch ("Deutsche Facility") or the settlement date of the Entitlement Offer (whichever is
earlier). The Facility is subordinated to the existing security and
repayment arrangements under the Deutsche Facility.
Galaxy interim Managing Director Anthony Tse said: "We are extremely
pleased to have secured significant commitments to our current
Entitlement Offer and we are grateful for continued support from our
shareholders. In addition, the loan facility provides Galaxy with short
term funding assurances while the Entitlement Offer is being
As previously advised, the closing date for eligible shareholders to
participate in the Entitlement Offer has been extended to 07:00pm AEST
on 31 July 2013. The extension allows shareholders sufficient time to
consider the announcement on 26 July 2013 of an agreement to
restructure the convertible bonds outstanding with the Company's
The indicative timetable for the Offer is set out below:
Closing date for acceptances
31 July 2013 at 7.00pm (AEST)
New Securities quoted on a deferred settlement basis
1 August 2013
Notification to ASX of under subscriptions
6 August 2013
Allotment and issue of New Securities
On or before 9 August 2013
Despatch of holding statements
12 August 2013
Trading of New Securities expected to commence
12 August 2013
** The above dates are indicative only. The Company, in conjunction with
the lead manager to the Offer, reserves the right to vary the above
dates, subject to the ASX Listing Rules and Corporations Act.
About Galaxy (ASX: GXY)
Galaxy Resources Ltd ("Galaxy") is an Australian-based global lithium
company with lithium production facilities, hard rock mines and brine
assets in Australia, China, Canada and Argentina. The Company is a
lithium producer listed on the Australian Securities Exchange (Code:
GXY) and is a member of the S&P/ASX 300 Index.
Galaxy wholly owns the Jiangsu Lithium Carbonate Plant in China's
Jiangsu province. The Jiangsu Plant will eventually produce 17,000 tpa
of battery grade lithium carbonate, becoming the largest producer in
the Asia Pacific region and the fourth largest in the world.
Galaxy is also advancing plans to develop the Sal de Vida (70%) lithium
and potash brine project in Argentina situated in the lithium triangle
(where Chile, Argentina and Bolivia meet), which is currently the
source of 60% of global lithium production. Sal de Vida has excellent
promise as a future low cost brine mine and lithium carbonate
The Company owns Mt Cattlin (100%) spodumene project near Ravensthorpe
in Western Australia and the James Bay (100%) Lithium Pegmatite Project
in Quebec, Canada.
Lithium compounds are used in the manufacture of ceramics, glass,
electronics and are an essential cathode material for long life
lithium-ion batteries used to power e-bikes and hybrid and electric
vehicles. Galaxy is bullish about the global lithium demand outlook and
is positioning itself to become a major producer of lithium products.
Caution Regarding Forward Looking Information.
This document contains forward looking statements concerning Galaxy.
Forward-looking statements are not statements of historical fact and
actual events and results may differ materially from those described in
the forward looking statements as a result of a variety of risks,
uncertainties and other factors. Forward-looking statements are
inherently subject to business, economic, competitive, political and
social uncertainties and contingencies. Many factors could cause the
Company's actual results to differ materially from those expressed or
implied in any forward-looking information provided by the Company, or
on behalf of, the Company. Such factors include, among other things,
risks relating to additional funding requirements, metal prices,
exploration, development and operating risks, competition, production
risks, regulatory restrictions, including environmental regulation and
liability and potential title disputes.
Forward looking statements in this document are based on Galaxy's
beliefs, opinions and estimates of Galaxy as of the dates the forward
looking statements are made, and no obligation is assumed to update
forward looking statements if these beliefs, opinions and estimates
should change or to reflect other future developments.
Not For Release in US
This announcement has been prepared for publication in Australia and may
not be released in the U.S. This announcement does not constitute an
offer of securities for sale in any jurisdiction, including the United
States, and any securities described in this announcement may not be
offered or sold in the United States absent registration or an
exemption from registration under the United States Securities Act of
1933, as amended. Any public offering of securities to be made in the
United States will be made by means of a prospectus that may be
obtained from the issuer and that will contain detailed information
about the company and management, as well as financial statements.
SOURCE: Galaxy Resources Limited
For further information:
Interim Managing Director
Galaxy Resources Ltd
Tel (office): +61 (0)8 9215 1700
Tel (office): +61 (0)8 9485 8888
Tel (mobile): + 61 (0)488 400 248