PERTH, WESTERN AUSTRALIA -- (Marketwire) -- 02/25/13 -- Talison Lithium Limited ("Talison" or the "Company") (TSX: TLH) is pleased to provide an update on the status of the transaction with Chengdu Tianqi Industry (Group) Co., Ltd and its subsidiary Windfield Holdings Pty Ltd ("Windfield") (together "Tianqi").
On December 6, 2012, Talison announced that it had executed a Scheme Implementation Agreement (the "SIA") with Tianqi under which it is proposed that Windfield, or a wholly-owned entity of Windfield, will acquire the balance of the ordinary shares that it does not already own and options in Talison by way of schemes of arrangement ("Tianqi Schemes(1)") for cash consideration of C$7.50 per Share. This values the equity of Talison at approximately C$848 million on a fully diluted basis.
On December 19, 2012, the Federal Court of Australia ordered the convening of meetings of Talison Securityholders to consider the Tianqi Schemes ("Scheme Meetings") to commence at 10:00am on February 27, 2013. The Scheme Booklet, which is available on SEDAR and on Talison's website, was mailed to Talison Securityholders on or about February 5, 2013.
Under the SIA, Tianqi was given until 5:00pm (Perth time) today (February 25, 2013) to provide documentary evidence that reasonably demonstrates the availability to Windfield of the funding required to complete the transaction with Talison.
Talison confirms that Tianqi has provided the necessary documentary evidence in connection with its funding arrangements which are as follows:
-- Tianqi and Windfield have entered into agreements with Leader Investment Corporation ("Leader"), a subsidiary of China Investment Corporation ("CIC") under which CIC, through Leader, has committed to fund Windfield with approximately C$300 million of long term equity in exchange for an approximately 35%, non-controlling equity interest in Windfield to support the Transaction. CIC has received formal advice from Australia's Foreign Investment Review Board that the Australian Government has no objections to CIC's investment in Windfield through Leader.-- Tianqi, and one of its wholly owned subsidiaries, have also entered into loan agreements for US$200m from Credit Suisse AG, US$120m from Industrial and Commercial Bank of China Ltd and US$50m from Twenty Two Dragons Ltd (a company owned by ADM Capital).The funding arrangements outlined above remain subject to the satisfaction of a number of conditions precedent to drawdown. Tianqi has advised Talison that it expects each of these conditions (other than those that relate to implementation of the Tianqi Schemes) to be satisfied prior to the second court hearing scheduled for March 12, 2013.
Tianqi currently holds approximately 19.9% of the issued share capital of Talison. The funding arrangements outlined above, together with the US$25 million deposit previously paid by Tianqi, are sufficient to fund Tianqi's obligation to purchase the remaining approximately 80% of Talison Shares and Options under the Tianqi Schemes.
(1) The SIA also proposes that Tianqi will acquire 100% of the options to acquire Shares ("Options") through an option scheme of arrangement ("Option Scheme") for cash consideration of C$7.50 per Option less the exercise price for that Option.
