After a $6.6 billion takeover attempt of Liontown Resources was stymied by Gina Rinehart, Albemarle has sold off all of its remaining shares in the company.
It took about a year for US lithium giant Albemarle to present an offer that Liontown’s leadership was happy with. But just weeks before a final decision could be reached, Gina Rinehart’s Hancock Prospecting began buying up Liontown shares, eventually gaining a 19.9 per cent stake capable of blocking the takeover.
Albemarle had its eye on Liontown’s Kathleen Valley lithium project, but not enough to play ball with Rinehart. In October, the company pulled the offer.
The US company’s four per cent stake in Liontown, worth roughly $120 million, hit the trading floor yesterday. The shares were sold between $1.26 and $1.32 each, representing a 7.4 per cent to 2.9 per cent discount to the last close.
The sale marks the end of Albemarle’s long journey for Liontown.
The news comes as Albemarle announces plans to reduce costs by scaling back spending during 2024. It plans to spend $1.6–$1.8 billion this year, at least $300 million less than 2023. This includes shelving plans for a fourth lithium hydroxide train at the Kemerton plant in WA.
The lithium major described the new spending level as “a re-phasing of larger projects in the near term to focus on (projects) that are significantly progressed, near completion and in startup”.
What about Liontown?
After the Albemarle offer fell through in October, Liontown launched a $365 million equity raise at a significant discount.
A $760 million debt funding package rounded things out, supported by a signed commitment letter and credit approved term sheet with a syndicate of domestic and international lenders such as ANZ, Commonwealth Bank, HSBC and Société Générale.
Liontown will use the funds from the equity raise and debt facilities to refinance a $300 million debt facility it has with Ford, involving the offtake of up to 150,000 tonnes per annum of spodumene concentrate across an initial five years.
Bringing its Kathleen Valley lithium project into production also looms large for Liontown, with early mine development and the construction of pre-production run-of-mine stockpiles key priorities.
Kathleen Valley is gearing up to become a Tier 1 battery metals mine, processing an initial three million tonnes per annum of ore for 500,000 tonnes per annum of spodumene concentrate.
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