Galaxy Resources to Sell Jiangsu Lithium Carbonate Plant

Galaxy Resources Ltd. (ASX:GXY) announced yesterday that it has signed a binding share purchase agreement with Sichuan Tianqi Lithium Industries Inc. (SZSE:002466) under which Sichuan will by Galaxy’s Jiangsu battery-grade lithium carbonate plant.

The company expects the transaction to close in about three months; it is subject to approval from Galaxy and Tianqi shareholders, as well as regulatory approval in China.

As quoted in the press release:

The agreement will be effected by way of the sale of 100% of the shares in the Company’s wholly owned Hong Kong subsidiary Galaxy Lithium International Limited (‘Galaxy International’) which is the registered holder of 100% of the shares of Galaxy Lithium (Jiangsu) Co., Ltd (‘Galaxy Jiangsu’) the owner of the Jiangsu plant. The basis of the transaction is an enterprise value of US$230 million for Galaxy Lithium, with the consideration comprising cash payable to Galaxy of US$122 million, together with the assumption by Tianqi of the entire US$108 million of Chinese bank debt at the Galaxy Jiangsu level. The final enterprise value and therefore cash consideration is subject to any working capital adjustments at Galaxy Jiangsu between the date of execution of the SPA and the closing date.

Click here to read the full Galaxy Resources Ltd. (ASX:GXY) press release.