Altech Advanced Materials AG: ALTECH INITIATES LISTED GREEN BOND PROJECT FUNDING OPTION

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Frankfurt am Main (pta044/20.08.2020/19:30 UTC+2) Highlights:

* Bond Structuring and Execution Plan initiated
* Another alternative for a second layer of project financing
* Independent confirmation of green credentials of Altech Australia's HPA project

Altech Advanced Materials AG ("AAM") (FRA: AMA1) is pleased to announce that Altech Chemicals Limited ("Altech") has initiated a listed green bond project funding option. Altech has mandated Bluemount Capital (WA) Pty Ltd (Bluemount), which will work in conjunction with London based Bedford Row Capital (Bedford), as structuring agent, to prepare a Bond Structuring and Execution Plan for an offering of asset-backed (second lien) listed "green" bonds to the European bond market.

On 20 May 2020, AAM announced that Altech Australia's high purity alumina (HPA) project had been formally assessed as "green" by the independent Centre of International Climate and Environmental Research (CICERO), based in Oslo, Norway. This positive project assessment, formally termed a "second opinion", confirmed that Altech Australia's HPA project is of a type suitable for finance via green bonds. The project is appropriate to be considered by investors that participate in the green bond market, the size of which is approaching USUSD250 billion annually and a large portion of which is present in Europe.

The Bond Structuring and Execution Plan will provide a definitive execution program for a green bond offering, and will present firm recommendations for the key terms that will have been derived from preliminary market soundings, these would include:

Offer Size: minimum USUSD100m
Term to Maturity: at least 5 years
Security: second lien, behind senior lender KfW IPEX-Bank
Secondary Market: likely the Frankfurt Stock Exchange

Background

Despite the negative impact that the COVID-19 pandemic has had on global markets since March 2020, AAM has continued to focus on bringing about the close of project financing for Altech Australia's Malaysian HPA project, whilst ensuring that stage 2 early works construction activities were completed at the HPA plant site. In addition to the USUSD190 million senior project finance loan facility available from German government owned KfW IPEX-Bank, Altech and AAM together continue to pursue multiple additional subordinated debt funding options. The use of bonds to secure a secondary level of project finance debt could be an alternative to bank mezzanine debt.

An advantage of bonds over bank finance is that only the interest (coupon) is paid to bond holders during the term, whereas mezzanine bank debt requires the payment both principal and interest over the loan term. Bonds are typically re-financed at the end of the term, and in the case of start-up projects such as Altech Australia's HPA project, the coupon (interest rate) payable on re-finance would expect to be lower because project construction and commissioning risk is removed, and an operating track-record for the project would be in place.

Work on satisfying the outstanding requirements of the previously announced USUSD90 million mezzanine loan facility with preferred mezzanine lender Macquarie Bank (Macquarie) remain on-going. Technical and market due diligence is complete, however Macquarie has requested that Altech secure pre-sales of a proportion of its planned future HPA production to an end user at fixed product prices, to demonstrate some pricing transparency in an otherwise opaque market. AAM continues to engage with a number of European electric vehicle (EV) sector participants that are potential product end users interested in securing future HPA supply.

Completion of the Bond Structuring and Execution Plan expected during next quarter.

The Management Board

About Altech Advanced Materials AG

Altech Advanced Materials AG ("AAM") currently plans to subscribe up to 49% in Altech Chemicals Australia PTY LTD ("Altech Australia") for up to USD 100 million from Altech Chemicals Ltd, Australia. AAM is currently implementing its capital raising strategy to be able to fund the investment.

Altech Australia is currently building a high-purity alumina (99.99%, 4N HPA) production facility for 4,500 tons p.a. in Malaysia and also has its own deposit for the mining of the main raw material kaolin. 4N HPA is needed for the production of LED lights as well as a separator for lithium-ion batteries, e.g. needed for electric vehicles and smartphones. Market demand for 4N HPA is expected to grow with a CAGR of 30% p.a. until 2028. The process patented by Altech Australia allows the production of HPA as cost leader, as the HPA can be obtained directly from kaolin. This allows production without the use of energy-intensive aluminium. The production volume for the first 10 years is secured by an off-take agreement with Mitsubishi Australia and the production capacity and quality is guaranteed by the German plant manufacturer, SMS group GmbH, Dusseldorf, which has also agreed to contribute in equity to the Altech HPA project.

The project has an investment volume of approximately USD 390 million, of which KfW-IPEX Bank has already committed USD 190 million under certain conditions and of which USD 10 million is assumed as equity investment from SMS group GmbH. Altech Chemicals is in talks with Macquarie Bank on the provision of USD 90 million in mezzanine capital. The remaining USD 100 million is to be made available by AAM.

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Emitter:	Altech Advanced Materials AG Ziegelhäuser Landstraße 3 69120 Heidelberg Germany
Contact Person:	Hansjörg Plaggemars
Phone:	+49 6221 64924-0
E-Mail:	info@altechadvancedmaterials.com
Website:	www.altechadvancedmaterials.com
ISIN(s):	DE000A2LQUJ6 (Share)
Stock Exchange(s):	Regulated Market in Frankfurt; Free Market in Berlin, Dusseldorf