In response to inquiries from the Shenzhen Stock Exchange, Tianqi Lithium said that since the beginning of 2021, the company has repaid a total of about 8.562 billion yuan in principal; as of September 30, 2021, the company's asset-liability ratio has fallen to about 61 per cent. At the same time, benefiting from the positive impact of the recovery of the industry, the company's three major domestic production bases are in full production, the sales prices of lithium compounds and derivatives have risen, and the company's operating net cash flow has increased significantly compared with the same period last year. In addition, the company is actively preparing for the issue of Hong Kong shares, which, if implemented smoothly on schedule, will fundamentally improve the company's capital structure and financial capacity. The company believes that there is no significant liquidity risk at present, and there are no major adverse factors that affect the ability of sustainable operation.
The company's original reply is as follows:
As of September 30, 2021, the company's currency fund balance was 1.223 billion yuan, an increase of 23% compared with the beginning of the year. In addition, the balance of bank acceptance drafts held by the company was 422 million yuan, an increase of 116.41% over the beginning of the year. The balance of interest-bearing financial liabilities (principal) is about 20.242 billion yuan, and the balance (principal) of financial liabilities due within one year is about 3.16 billion yuan, which is significantly lower than that at the beginning of the year.
Since 2021, the company has introduced strategic investor IGO through its subsidiaries to repay the syndicated M & A loan principal of US $1.2 billion and corresponding interest, and use the operating balance funds to repay the domestic loan principal of 567 million yuan. At the same time, the syndicated M & A loan principal of about US $30 million has been repaid in advance by overseas subsidiaries and participating companies. Since the beginning of 2021, the company has repaid a total of about 8.562 billion yuan in principal; as of September 30, 2021, the company's asset-liability ratio has dropped to about 61%.
At the same time, benefiting from the positive impact of the recovery of the industry, the company's three major domestic production bases are in full production, the sales prices of lithium compounds and derivatives have risen, and the company's operating net cash flow has increased significantly compared with the same period last year.
Up to now, the financial debt balance of the company that is about to mature in the next year is about 3.16 billion yuan, including: domestic working capital loan of about 2.1 billion yuan and leading option financing of about 159 million US dollars. In addition, the principal balance of the syndicated M & A loan due on November 25, 2022 is about $668 million. In response to the aforementioned debt, the company intends / is taking the following measures:
1) the company has completed the transaction with IGO on schedule and repaid the principal of the syndicated loan of US $1.2 billion, and the substantive conditions for the automatic extension of the syndicated loan to November 25, 2022 have been reached (for details, see the "Progress announcement on matters related to the extension of M & A loans" published by the company in the designated information disclosure media on December 29th, 2020);
2) the company has always maintained good communication and cooperation with local governments, regulators and domestic cooperative banks, and implemented the "concerted Action Financial Assistance Program" through the unified coordination platform of the debt Committee. The company's short-term debt to take "non-drawing loans, continuous loans, non-pressure loans" and other safeguard measures, the current operation is stable and effective, maintaining the normal turnover of working capital loans;
3) the financing balance of the lead option can be repaid in cash, or the pledged B shares of SQM can be delivered directly, which will not affect the continuous and normal operation of the company.
At present, the prosperity of the lithium industry continues to improve, the company's production and sales are booming, and the cash flow of operating activities has increased significantly, which has enhanced the company's debt-paying ability and sustainable operating ability. In addition, the company is actively preparing for the issue of Hong Kong shares, which, if implemented smoothly on schedule, will fundamentally improve the company's capital structure and financial capacity.
To sum up, the company believes that there is no significant liquidity risk at present, and there are no major adverse factors that affect the ability to continue to operate.
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