From Nikkei Asia, December 22:
The chairman of troubled Chinese miner Tianqi Lithium is to lend the company $117 million under a condition of the company's deal with Australian miner IGO Ltd.
Tianqi Lithium came close to defaulting last month on $1.88 billion in loans taken out two years ago to finance the purchase of a large stake in Chilean lithium miner SQM. IGO helped Tianqi Lithium out of the debt squeeze by agreeing to buy nearly half of Tianqi Lithium's interest in a joint venture that controls Greenbushes, the world's largest lithium mine, and a nearby processing facility in Western Australia state.
Tianqi Lithium, in a filing to the Shenzhen Stock Exchange, where it is listed, said that Chairman Jiang Weiping's investment vehicle will extend a loan of $117 million to the company as it struggles to repay its heavy debt obligations created by a series of acquisitions.
Investors welcomed the news, with analysts viewing the development as an additional personal guarantee by the company's owner. Tianqi Lithium's shares jumped 10%, the Shenzhen exchange's daily trading ceiling, in Tuesday's morning session and eventually closed up 3.1% from Monday.
Dennis Ip, an analyst at Daiwa Capital Markets in Hong Kong, told Nikkei Asia that it was "interesting to see [the] market reacting so positively" to Tuesday's announcement. The cash contribution was "to ensure Mr. Jiang having skin in the game" for the restructuring deal with IGO....
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