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    • Jan 9, 2023

Essential Metals and Tianqi Lithium Energy Australia to enter into a Scheme of Arrangement



  • Tianqi Lithium Energy Australia Pty Ltd (TLEA) proposes to acquire 100% of Essential Metals Limited (Essential) (ASX: ESS) by way of a Scheme of Arrangement (Scheme) detailed in a binding Scheme Implementation Agreement (SIA) signed by TLEA and Essential

  • TLEA is an incorporated joint venture owned 51% by Tianqi Lithium Corporation, a global energy materials company listed on the Shenzhen and Hong Kong Stock Exchanges currently capitalised at ~US$19 billion, and 49% by IGO Limited (ASX: IGO), a mining and processing company which produces metals critical for clean energy and currently capitalised at ~A$10.5 billion. TLEA owns an integrated lithium business, including a 51% interest in the Greenbushes Lithium Operation (Albemarle Corp, 49%) and 100% of the Kwinana Lithium Hydroxide Refinery, both located in Western Australia

  • The Scheme Consideration is A$0.50 in cash per ESS share, implying a fully diluted equity value for Essential of ~A$136 million

  • The Scheme Consideration represents a significant premium of:

o 44.9% to the closing Essential share price of A$0.345 per share on 6 January 2023

o 45.7% to the 1-month Essential VWAP of A$0.343 per share up to and including 6 January 2023

  • The Scheme is unanimously recommended by the Essential Board of Directors in the absence of a superior proposal and subject to the independent expert opining that the Scheme is in the best interests of Essential shareholders

  • The SIA contains various standard "no shop", "no talk", "notification" and "matching rights" provisions, with a break fee payable in certain circumstances

  • The Scheme is subject to various conditions including


TRANSACTION SUMMARY


Essential Metals Limited (Essential) (ASX: ESS) (the Target) and Tianqi Lithium Energy Australia Pty Ltd (TLEA) (the Bidder) are pleased to announce the execution of a binding Scheme Implementation Agreement (SIA) for the implementation of a Scheme of Arrangement (Scheme) under which TLEA will acquire 100% of the issued capital of Essential. If the Scheme is implemented, each Essential shareholder on the Record Date will receive a cash amount of A$0.50 per Essential




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