SMM: due to debt default "Black Swan", the Tianqi lithium industry, known as the "Lithium King", opened by the limit. Then opened the limit after the low shock, as of press time, Tianqi lithium industry is still down more than 8.4%, the share price is 22.51 yuan per share, the transaction amount is 2.107 billion, the turnover rate is 6.36%.
On the evening of November 13, Tianqi Lithium Industry issued a notice revealing the possibility that it could not be repaid in time and in full.
The announcement said that 1.884 billion US dollars (about 12.593 billion yuan) of the M & A loans raised by the syndicate of M & A loans led by the company and CITIC Bank will expire at the end of November this year. Although Tianqi Lithium Industry has submitted an application to the syndicate to adjust the term of the loan, it is still under examination and approval, and there is the possibility that the loan will not be successfully extended and the company will not be able to repay it in time and in full, leading to default.
"Snake swallowing Elephant" acquisition detonates debt crisis
The default stems from a snake-like overseas merger and acquisition two years ago.
In 2018, Tianqi Lithium signed an agreement with Canadian fertilizer company Nutrien to buy a stake in Chilean lithium mining giant SQM23.77% for $4.066 billion (25.92 billion yuan), making it its second-largest shareholder. Together with the 2.1 per cent stake originally held, Tianqi Lithium holds a total stake in SQM25.86%.
At that time, Tianqi Lithium raised only US $726 million and borrowed a total of US $3.5 billion from syndicates. Aggressive leveraged buyouts lay the groundwork for future debt explosions.
According to public data, SQM is one of the major producers of lithium carbonate and lithium hydroxide in the world. Its salt lake asset in Atacama, Chile, is the lithium salt lake with the highest lithium concentration, the largest reserves and the most mature exploitation conditions in the world.
It is worth mentioning that Tianqi Lithium Industry acquired SQM, almost at a time when global lithium salt prices were at their peak. Since then, the price of battery-grade lithium carbonate has been on the decline.
Affected by the SQM equity acquisition, Tianqi Lithium Industry's performance continues to decline. According to the quarterly report for 2020, the revenue of Tianqi Lithium Industry during the reporting period was 2.427 billion yuan, down 36.09% from the same period last year, and the net profit of returning mother was-1.103 billion yuan, down 890.95% from the same period last year.
The performance is not good, the company's share price is also falling all the way. Statistics show that Tianqi lithium industry has fallen by more than 20% this year, and its share price has fallen nearly 60% since its peak in 2017.
The major shareholders cashed out 200000 of the shareholders in a quagmire.
Even so, it failed to stop the controlling shareholders from frantically reducing their holdings.
Tianqi Lithium shares have risen 24.14% since November. Tianqi Group reduced its holdings of 9.716792 million shares on November 3, 4, 5, 6 and 9, cashing out a total of 226 million yuan in a single month. Since the second half of the year, Tianqi Group has reduced its holdings of the company's shares by 4.3455% in the form of centralized bidding and bulk trading, cashing out a total of 1.433 billion yuan.
The financial aspect of Tianqi Group is also not optimistic. As of November 10, 2020, the total number of pledged shares due in the coming year of Tianqi Group has reached 354.9835 million, accounting for 75.82% of its shares and 24.03% of the company's total share capital.
Tianqi Lithium Industry is the leading enterprise of lithium resources in China, mainly engaged in the exploitation and sales of lithium resources and the production and manufacture of lithium salt products. From 2014 to 2017, at a time when the new energy vehicle market is hot, Tianqi Lithium Industry's performance is growing rapidly and is regarded as a white horse stock in the industry.
As of Oct. 30, the company still has nearly 200000 shareholders, according to the company's three-quarter report.
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