Tianqi Lithium Industry 259 billion buy Chilean square equity plan released

Tianqi Lithium acquired the global lithium giant SociedquimayMinera.A. (hereinafter referred to as the square meter company) The latest progress has been made. Following the announcement on May 18 that it had signed an agreement to purchase 23.77 % of the square meter company's equity, on the evening of May 30, Tianqi Lithium disclosed the acquisition. "Major Asset Purchase Report(Draft)".

Due to the large amount of transactions and the large amount of underlying assets, the transaction constitutes a major asset restructuring of Tianqi Lithium. According to the draft acquisition, Tianqi Lithium will complete the payment through self-raised funds and loans. Tianqi Lithium said that the successful acquisition of the equity of the square meter will bring long-term and stable financial benefits to Tianqi Lithium.

Tianqi Lithium Industry will be able to nominate 3 directors

Tianqi Lithium Industry announced that according to the due diligence report issued by the Chilean lawyer and the 2017 annual report of the square meter company, the current major shareholders of the square meter company include three holding groups, the South American Prairie Group, the Kowa Group and the Nutrien Group respectively. The square meter company is 29.97%, 2.12%, and 32% of the shares. In addition, other shareholders hold 35.91% of the shares of the square meter company.

The transaction was paid by Tianqi Lithium to the counterparty Nutrien and others for approximately US$4.066 billion (according to the RMB exchange rate intermediate price of RMB 25.893 billion announced by the China Foreign Exchange Trading Center on May 17, 2018). 23.77% of the shares of the square meter company.

If Tianqi Lithium successfully acquired the above equity, and the company passed the 552 shares of Class B shares held by Tianqi Lithium Industry in Hong Kong, Tianqi Lithium will hold 25.86% of the total issued shares of the square meter company. The shareholdings of the South American Prairie Group and the Kowa Group remain unchanged.

According to reports, because Tianqi Lithium and the largest shareholder of the square meter company South American Prairie Group enjoy the same voting rights. According to the due diligence report issued by the Chilean lawyer, after the completion of the transaction, the square meter company still has no shareholder or shareholding group to have control over it.

Tianqi Lithium said that after the completion of this purchase, the company can ensure that the three candidates nominated for the election are elected. Although the acquisition of Tianqi Lithium can not obtain a controlling stake, it cannot be consolidated, but through non-controlling equity investment. While the company obtains a continuous, stable and good investment income of square meters, the source of income will be moderately diversified, the company's overall anti-risk ability will be enhanced, and the continuous competitiveness will be improved, which will help to consolidate the company's industry status.

Institutional commitment to lending

The square meter company is mainly engaged in the production and sales of special plant fertilizers and industrial chemicals, but its current focus on the market is its lithium resources.

According to Tianqi Lithium Industry Announcement, in 2016 and 2017, the largest proportion of sales revenue of square meters was its fertilizer products. The sales revenue of lithium and its derivatives was US$510 million and US$640 million, respectively, accounting for 26.54 respectively. %, 29.88%, but during the above period, the gross profit margin of lithium and its derivatives was the highest among the main products of the square meter, which was 65.88% and 70.64% respectively. According to the announcement, “Liquid product prices have risen sharply in 2017 due to tight supply and demand in the market, which is about 25% higher than in 2016. sqm expects market prices in the first half of 2018 to be higher than in the fourth quarter of 2017. 20%". The announcement shows that the square meters have lithium resources in Chile, Argentina, Australia and other countries.

According to the announcement, from 2016 to 2017, the operating income of the square meter company's consolidated income statement was US$1.94 billion and US$2.16 billion, respectively, and the net profit attributable to owners of the parent company was US$280 million and US$430 million respectively.

Tianqi Lithium said that the company will complete the payment through its own funds, bank loans and other self-financing funds. The square meter company has strong profitability and stable cash dividends, and holding more square meters of company shares can be The company brings long-term and stable financial returns.

The acquisition plan shows that as of March 31, 2018, Tianqi Lithium's consolidated statement currency balance was 4.902 billion yuan, and the bank accepted Huiyi Huiyuan ticket of 12.61 yuan. Under the premise of ensuring the funds required for daily operations, Tianqi Lithium The industry can pay part of the transaction consideration for its own funds; on May 4, 2018, Tianqi Lithium signed a “Financing Commitment Letter” with an offshore financial institution, which promised to provide about 10 billion US dollars of funds, May 2018. On the 4th, Tianqi Lithium signed a loan commitment letter with a commercial bank. The bank promised to provide about 2.5 billion US dollars by syndicated loan (the actual loan amount is subject to the final syndicated loan contract).

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