Tianqi Lithium says controlling shareholder may net up to 16B yuan investment

Tianqi Lithium Corp. said Jan. 30 that an entity was planning to invest up to 16 billion yuan in its controlling shareholder, Chengdu Tianqi Industry Group Co. Ltd., as the Chinese lithium producer seeks to cut debt.

Tianqi Lithium said it signed a nonbinding and nonexclusive memorandum Dec. 22, 2020, with Chengdu Tianqi and an unnamed entity that was interested in investing 10 billion yuan to 16 billion yuan in Chengdu Tianqi.

Tianqi Lithium said a private equity fund would be set up for the investment, and the investor had experience in the lithium sector.

The company secured a $1.4 billion investment from Australian nickel and gold miner IGO Ltd. in December 2020 after it was granted a one-month extension for a syndicated loan to partially fund its $4.07 billion acquisition of a 23.77% stake in Sociedad Quimica y Minera de Chile SA in 2018.

The latest filing by Tianqi Lithium was in response to queries the Shenzhen Stock Exchange sent in January asking Tianqi Lithium to clarify whether a 15.93 billion yuan private placement to its controlling shareholder would hurt the interests of smaller shareholders. The company canceled the placement two days after the exchange query.

Chengdu Tianqi owns 30.05% of Tianqi Lithium and reduced its stake by 6% in 2020.

As of Jan. 29, US$1 was equivalent to 6.43 yuan.