East Coast Research Altech Valuation Inches Higher as Analyst Firm adds CERENERGY to Model

Perth, Australia (ABN Newswire) - Altech Batteries Limited (ASX:ATC) (FRA:A3Y) (OTCMKTS:ALTHF) is pleased to announce that it has executed a binding Term Sheet to acquire Altech Advanced Materials AG's (FRA:AMA) 25% equity interest in Altech Energy Holdings GmbH (AEH) (75% holder of CERENERGY(R)) and 25% equity interest in Altech Industries Germany GmbH (AIG) (100% holder of Silumina AnodesTM) including all outstanding shareholder loans from AIG and AEH to AAM; together the 'Acquisitions'.

Highlights

- Altech's offer to acquire Altech Advanced Materials AG (AAM) project stakes accepted by AAM

- Altech to acquire additional 18.75% stake in CERENERGY(R) Project and additional 25% stake in Silumina AnodesTM Project including outstanding shareholder loans to AAM

- Altech will hold 75% of CERENERGY(R) & 100% of Silumina AnodesTM projects post acquisition

- Fraunhofer remains as 25% JV partner of the CERENERGY(R) project

- Altech will issue AAM approximately 532 million fully paid ordinary shares

- Acquisitions are valued at approximately A$23.3 million

- AAM market capitalisation on Frankfurt Stock Exchange is approximately A$38.7 million

- Based on DFS, and risk-adjusted AAM value, both projects valued at A$77 million

- AAM post-acquisition will be 21% shareholder of ATC

- New simplified corporate structure serves to optimise financing options

- Potential for ATC to divest acquired interests to strategic partners for project financing

- Subject to shareholder approval by both ATC and AAM

- General Meeting to be held inclusive of Independent Expert Report

In accordance with the project's ownership, the AAM equity interests to be acquired by ATC represent an additional 18.75% stake in the CERENERGY(R) project and an additional 25% stake in the Silumina AnodesTM project (refer Figure 1* Corporate Structure before and after Acquisitions).

Fraunhofer remains as 25% JV partner of the CERENERGY(R) project.

As consideration for the Acquisitions, and subject to shareholder approval, Altech will issue to AAM approximately 532 million fully paid ordinary shares, resulting in AAM holding 21% of Altech's issued share capital post Acquisitions. Based on the volume weighted average price (VWAP) of Altech shares being $0.044 over the 15 trading days prior to this announcement, the total consideration offered is valued at A$23.3 million. The shares proposed to be issued to AAM will be subject to a voluntary escrow period of 12 months from the date of issue. The Acquisition is still subject to several conditions precedent, including the approval of the Acquisitions by shareholders at the General Meetings of AAM and ATC.

Valuation of Transaction

AAM's current market capitalisation on the Frankfurt Stock Exchange A$38.7 million (equal to EUR23.2 million), while the consideration offered for its sole assets amounts to A$23.3 million.

The Cerenergy Project DFS has a Net Present Value (NPV) of A$281 million, with AAM's 18.75% stake equating to A$52 million at full financing. Applying a standard 0.23 NAV discount for financing risk, the adjusted valuation is A$12 million. The Silumina Project DFS has an NPV of A$1.14 billion, with AAM's 25% stake translating to A$285 million. After applying the same 0.23 NAV discount, the adjusted valuation stands at A$65 million. In total, the risk-adjusted value of both projects is A$77 million, compared to the A$23.3 million consideration offered for their acquisition.

AAM initially acquired a 25% stake in both the CERENERGY and Silumina Projects from ATC for a total consideration of A$8 million. Following the acquisition, AAM made additional capital contributions in response to cash calls from both project entities, providing a total of A$10.8 million to support project development, operational expenses, and financing commitments. This brings AAM's total investment in the projects to date to A$18.8 million compared to the A$23.3 million consideration offered for their acquisition.

Post Acquisitions

Post Acquisitions, Altech will own 100% of the Silumina AnodesTM Project and 75% of the CERENERGY(R) Battery Project, with Fraunhofer as 25% joint venture partner.

Strategic Rationale and Benefits

This transaction represents a pivotal moment for Altech's strategic growth. By acquiring 100% ownership of Silumina AnodesTM and 75% ownership of CERENERGY(R), Altech is positioning itself to accelerate the development and commercialisation of these high-value projects. The Silumina AnodesTM project is a breakthrough in battery material technology, incorporating high-purity alumina in silicon anodes to improve battery performance. The CERENERGY(R) project, meanwhile, is at the forefront of next-generation sodium chloride battery development, offering a sustainable alternative to conventional lithium-ion technology.

Additionally, the transaction presents a practical solution to recent funding challenges by AAM. Uncertainty among German investors regarding AAM's ownership structure has complicated AAM's fundraising efforts and hindered sustained support in Germany.

Altech will have the autonomy to make key investment and operational decisions without requiring external approvals, thereby enhancing project execution efficiency. Furthermore, the Acquisitions will provide Altech with a stronger negotiation position when engaging with potential strategic partners, customers, and financiers. Through these transactions, AAM will retain long-term upside potential through its new equity stake in Altech. This structure aligns the interests of both companies and ensures that AAM continues to benefit from future successes. AAM will remain as an investment company on the Frankfurt Stock Exchange rather than holding direct interest of both projects.

Consolidating ownership reduces the complexity of project governance and enhances Altech's ability to execute strategic initiatives with greater agility and less complexity. Additionally, the issuance of shares to AAM in lieu of cash payments preserve Altech's balance sheet strength, allowing it to deploy capital more effectively towards project development and commercialisation.

The Board of Altech believes the transaction will deliver significant strategic benefits, including:

- Consolidation of ownership in the Silumina AnodesTM and CERENERGY(R) projects, enabling streamlined decision-making and project execution

- Improved operational flexibility and efficiency to fast-track commercialisation efforts

- Addressing recent funding challenges faced by AAM and improving capital structure alignment

Conditions Precedent

The completion of the Acquisitions is subject to:

- All necessary regulatory approvals, including:

o ASX Listing Rule 7.1 shareholder approval for the issuance of consideration shares.

o Shareholder approval under item 7, section 611 of the Corporations Act 2001 (Cth), to the extent that AAM, or any of its shareholders, will increase its voting power above 20% in Altech.

- Approval from the Australian Treasurer under the Foreign Acquisitions and Takeovers Act 1975 (Cth), if required.

- Approval by AAM's shareholders meeting

- Execution of an escrow deed between Altech and AAM regarding the voluntary escrow conditions.

Board Recommendation

Mr Hansjoerg Plaggemars and Mr Uwe Ahren, being current Managing Directors of AAM, did not take part in any voting on the Acquisitions in their position as Board members of Altech and do not make a recommendation on the proposal. Mr Iggy Tan, being a previous Managing Director of AAM (resigned 31 December 2024) did not take part in any voting on the Acquisitions and does not make a recommendation on the proposal.

The Independent Directors of Altech, consisting of Mr Luke Atkins, Mr Dan Tenardi and Mr Peter Bailey, unanimously recommend that shareholders vote in favour of the Acquisitions, subject to the Independent Expert's Report concluding that the transaction is fair and/or reasonable to Altech shareholders. Altech's Board strongly believes that this transaction will enhance shareholder value over the long term by consolidating ownership, streamlining decision-making and ensuring that both projects progress efficiently towards commercialisation. The transaction structure ensures that AAM remains aligned with Altech's success while addressing funding constraints in a manner that benefits all stakeholders.

Next Steps

Altech will continue working closely with AAM to finalise definitive agreements and complete all required regulatory and shareholder approvals. Shareholders will be kept informed of any significant developments, and further announcements will be made as key milestones are achieved. The Company remains committed to executing this strategic initiative in a manner that enhances shareholder value and accelerates its growth objectives. The Board looks forward to engaging with shareholders throughout the approval process and appreciates the ongoing support from its investors.

To view the Indicative Timetable, please visit:
https://abnnewswire.net/lnk/DK6T5Z7Q

About Altech Batteries Ltd:  

Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.

Perth, Australia (ABN Newswire) - Altech Batteries Ltd (ASX:ATC) (FRA:A3Y) (OTCMKTS:ALTHF) announced an update on funding of the CERENERGY sodium-chloride solid-state battery project in Saxony, Germany.

On 14 June 2024, the Company, through its Germany subsidiary Altech Batteries GmbH ("ABG"), announced the appointment of global big four professional services firm ("funding adviser") to assist in securing finance for the construction of Altech's 120MWh CERENERGY battery manufacturing plant in Germany. The project's financing strategy is structured across three key areas: debt, equity, and grants. These sources will cover not only the capital expenditures but also financing costs, working capital, debt service coverage, and an additional contingency for potential business interruptions.

Debt Process

A funding invitation document (investment teaser) has been finalised and distributed to various financial institutions for debt funding in the project. The Group has engaged ten commercial banks and two venture debt funds in a first market round, receiving predominantly positive initial feedback. Several of these institutions have expressed strong interest in participating in the financing. The Group is now in the process of shortlisting potential lenders to identify the most suitable financial partners for the project. To support a thorough due diligence process, a secure data room has been set up, providing detailed project information to interested financiers and ensuring full transparency. The DFS financial model has been adjusted to stress-test various funding scenarios tailored to the lending institutions ABG has engaged with. Further steps involve determining the most suitable banks to form a syndicate and appointing a lead bank to guide the lending process. This syndicate will play a crucial role in structuring the financing arrangement to meet the project's requirements.

Equity Funding

In addition to ongoing debt financing efforts, the Group has engaged several equity advisers to support the equity component of the project's funding package. As part of this strategy, the Altech Group plans to divest a minority interest in the project to one or two strategic investors. This partial divestment aims to attract investors who can bring not only capital, but also strategic value to the project, aligning with the CERENERGY project's long-term growth and sustainability objectives.

The Group is specifically targeting large utility groups, data centre operators, investment funds and corporations that are heavily involved in the green energy transition. These entities are seen as ideal partners due to their strong alignment with the project's focus on sustainable energy solutions, as well as their capacity to provide substantial financial backing.

To date, significant progress has been made in these equity discussions. Several Non-Disclosure Agreements (NDAs) have been signed, allowing for deeper engagement with Figure 1. Financing Plan and Structure prospective investors. Altech has also circulated draft term sheets to a number of interested parties, outlining the proposed terms and conditions for investment. These documents serve as a starting point for negotiations, paving the way for more detailed discussions regarding the potential equity stake and partnership structure.

The strategic decision to divest a portion of the project is aimed at reducing the overall financial burden on the Company while bringing in experienced partners who can contribute to the project's success. By securing both the equity and debt components, the Company aims to finalise the full financing package, ensuring the timely construction and commissioning of the CERENERGY battery plant.

The next steps will focus on advancing these discussions and converting interest into formal commitments, which are crucial for moving forward with the project.

CEO and MD Mr Iggy Tan stated "The funding stage of any project is the most complex and challenging process of any project. Securing a big four funding adviser with expertise and a global network is a major step in our financing efforts.

Altech is advancing both debt and equity discussions, along with offtake agreements, to fully fund the CERENERGY project. We are seeing strong interest, especially from European banks and potential equity partners".

Breakthrough 55% Higher Energy Density Anode Achieved in Silumina Anodestm Lithium-ion Battery Altech achieved a remarkable milestone in its Silumina TM Anodes battery material technology. The Company is delighted to announce an average 55% surge in lithium battery anode energy capacity, marking a significant breakthrough. By utilising its innovative proprietary technology, Altech has now improved on the previous 30% energy increase, by blending alumina-coated silicon particles (10%) with battery-grade graphite, to create a composite graphite/silicon anode for the lithium-ion battery electrode. Upon activation, this composite material has now exhibited a remarkable 55% increase in capacity compared to the traditional graphite-only anode material.

In a series of tests, the Altech lithium-ion battery anode material exhibited an average energy retention capacity of approximately 500 mAh/g, which is significantly higher than the average of approximately 320 mAh/g for a normal lithium-ion battery anode. This represents an average of 55% increase in energy retention capacity. Importantly, the Altech Batteries demonstrated good stability and cycling performance, indicating that the technology is highly promising. Altech's technology has the potential to be gamechanging and has demonstrated that silicon particles can be modified to resolve the capacity fading caused by both the swelling and first-cycle-capacity-loss problems. Altech's Research and Development team, led by Dr. Jingyuan Liu, achieved this significant breakthrough.

To view Mr. Iggy Tan discuss the CERENERGY(R) funding, please visit:
https://www.abnnewswire.net/lnk/UFQ6984N

*To view the full Quarterly Report, please visit:
https://abnnewswire.net/lnk/8923YOT2

About Altech Batteries Ltd:  

Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.

Perth, Australia (ABN Newswire) - Altech Batteries Limited (ASX:ATC) (FRA:A3Y) (OTCMKTS:ALTHF) is pleased to advise that its CERENERGY(R) battery project has been formally assessed as the highest possible green rating category, "Dark Green", by the independent Centre of International Climate and Environmental Research (former CICERO), now owned by Standard and Poor's Global Ratings based in Oslo, Norway.

Highlights

- Highest possible green rating category of "Dark Green"

- S&P Global Ratings agency, Oslo, Norway

- CERENERGY(R) battery emissions (kgCO2/kWh) expected to be one-third of lithium-ion batteries

- Assessment on environmental benefits and risks - Shades of Green methodology

- Eligible projects can access Green Bond debt market

- One of the debt financing options for CERENERGY(R) project

Altech acknowledges this tremendous result and believes the accreditation is testament to Altech's CERENERGY(R) battery being one of, if not the greenest battery technology available today, with the lowest carbon footprint, lowest supply chain requirements and environmentally friendliest in relation to raw materials. This represents an outstanding achievement of the dedicated battery team at Altech and Fraunhofer IKTS and confirms the long-term, sustainable battery technology and business strategy of CERENERGY(R) being rated as "Corresponding to the long-term vision of a Low-Carbon Climate Resilient future" by S&P Global Ratings.

Overall Shades of Green Assessment

Based on the project category shades of green detailed below, and consideration of environmental ambitions reflected in Altech Batteries GmbH's Green Bond Framework, S&P assessed the framework as Dark Green. Eligible projects under the issuer's green bond framework are assessed based on their environmental benefits and risks, using Shades of Green methodology.

S&P assessed the project category as Dark Green, primarily reflecting the importance of battery storage in the transition of the power and industrial sectors, the contribution to the development of alternatives to lithium-ion and cobalt-free batteries, and the CERENERGY(R) battery's comparatively low expected emissions and fossil-free direct production process.

The CERENERGY(R) battery is a solid state, sodium chloride battery. While lithium-based batteries are expected to continue as the dominant battery technology going forward, sodium-based batteries are anticipated to play an increasing role, particularly in the stationary storage market. In the IEA's STEPS scenario, for example, sodium-based batteries account for around 10% of annual capacity additions by 2030. Shifts to sodium-based batteries are expected because they require no critical mineral/metal inputs such as lithium, graphite, copper or cobalt. The primary materials in the CERENERGY(R) battery are sodium, alumina, and (recycled) nickel derivatives. Nonetheless, solid state, sodium-based batteries remain an emerging technology, with less extensive academic literature into their environmental performance compared with lithium-based equivalents.

According to the framework, the CERENERGY(R) battery has expected emissions of around 14 kgCO2/kWh capacity (scope 1, 2, and 3). According to the framework, scope 1 and 2 emissions are 4.07 kgCO2/kWh capacity. According to the issuer, the capacity figure for scope 3 emissions of about 10 kgCO2/kWh derives from data provided by, and discussions with, large suppliers, transportation emissions, and conservative estimates for more minor suppliers. By way of comparison, a 2019 paper from by the IVL Swedish Environmental Research Institute found an estimated range of 61-106 kg CO2/kWh cradle-to-gate emissions for lithium-ion batteries (NMC chemistry) for vehicles, depending mainly on the electricity mix.

The entire CERENERGY(R) direct production process will be powered by renewable energy. Altech Batteries GmbH has entered a power purchase agreement for the direct provision of solar energy, complemented by on-site solar installations. The CERENERGY(R) battery uses raw materials that entail less environmental risks. The CERENERGY(R) battery is fully recoverable/recyclable. Recycling of the CERENERGY(R) battery will take place at the plant and is carried out via mechanical, rather than chemical, recycling methods, which typically entail lower emissions and energy use.

Altech Batteries GmbH foresees large demand from industry for the CERENERGY(R) battery. This could relate to the use of batteries in industrial micro grids, or to support systems in data centres, logistics centres, and hospitals. It also considers heavy industry, such as steel and chemicals as potential end users. The use of batteries in industry contributes to the transition if they support or facilitate decarbonisation and electrification efforts, rather than, for example, power-cost optimisation. The issuer furthermore foresees grid storage as a large use of the CERENERGY(R) battery, whether co-located with renewable assets or directly integrated into transmission networks. Such use of batteries is crucial for the integration of variable renewable energy sources (including for backup or peak load) and demand management, as well as for supporting grid reliability and stability, though can also be used for other purposes, for example purely for price arbitrage.

The issuer screened the CERENERGY(R) battery plant and supporting infrastructure (e.g. roads and power supply) for physical climate risks. Consideration of physical risk also extends to its supply chain, for example in its supplier risk assessments and consideration of potential disruption to supply chain logistics.

Managing Director Iggy Tan said that the positive project assessment, formally termed a "Second Party Opinion" (SPO), confirms that Altech's CERENERGY(R) project aligns to ICMA Green Bond Criteria and is of a type suitable for finance via green bonds. "The project can now be accessed by investors that participate in the green bond market, the size of which is approaching US$250 billion annually and a large portion of which is present in Europe. The CERENERGY(R) project's green shading score does not affect bond pricing, rather it provides a transparent mechanism by which green bond investors are able to categorise their investment in terms of climate risks and impacts. We are very proud of achieving this significant milestone" he said.

About Altech Batteries Ltd:  

Altech Batteries Limited (ASX:ATC) (FRA:A3Y) is a specialty battery technology company that has a joint venture agreement with world leading German battery institute Fraunhofer IKTS ("Fraunhofer") to commercialise the revolutionary CERENERGY(R) Sodium Alumina Solid State (SAS) Battery. CERENERGY(R) batteries are the game-changing alternative to lithium-ion batteries. CERENERGY(R) batteries are fire and explosion-proof; have a life span of more than 15 years and operate in extreme cold and desert climates. The battery technology uses table salt and is lithium-free; cobalt-free; graphite-free; and copper-free, eliminating exposure to critical metal price rises and supply chain concerns.

The joint venture is commercialising its CERENERGY(R) battery, with plans to construct a 100MWh production facility on Altech's land in Saxony, Germany. The facility intends to produce CERENERGY(R) battery modules to provide grid storage solutions to the market.