The new board of the merged company will have four independent directors from Orocobre and four from Galaxy Resources and Orocobre’s current chief executive. According to Orocobre managing director and chief executive officer Martín Pérez de Solay, the merger paves the way for a new top five lithium producer. The merger will unlock significant synergies for the merged company, create a diversified production base, and realise significant value for shareholders, said the companies.
This, of course, comes with the boom in cryptocurrency exchange-traded funds stocks in that country. The merged company will have a strong balance sheet with cash of $US487m making it well positioned to develop its world-class lithium projects with a production capacity of 40,000 tonnes per year. Galaxy Resources chief executive, Simon Hay, steps into a new role with the merged company as president of international business reporting to the chief executive. “Both Orocobre and Galaxy shareholders will benefit from the diversification, growth and scale of a top five global lithium chemicals company,” he said. “The logic of this merger is compelling,” said Orocobre chairman, Robert Hubbard, who becomes deputy chairman of the new merged company. In accordance with the Scheme, all Galaxy shares have now been transferred to Orocobre and eligible Galaxy shareholders have been issued the Scheme consideration of 0.569 Orocobre shares for each Galaxy share held on the Scheme record date.
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- The new company is expected to be included in the ASX 200 index and approaches the market value threshold for inclusion in the ASX 100 index.
- In accordance with the Scheme, all Galaxy shares have now been transferred to Orocobre and eligible Galaxy shareholders have been issued the Scheme consideration of 0.569 Orocobre shares for each Galaxy share held on the Scheme record date.
- Orocobre has its Olaroz and Cauchari lithium carbonate projects also in Argentina, and the Naraha lithium-ion hydroxide conversion facility in Japan for 10,000 tonnes per year.
- “The completion of the merger brings together assets and teams with highly complementary skills and knowledge,” de Solay said.
- As of August 16, 2021, Galaxy Resources Limited operates as a subsidiary of Allkem Limited.
But it’s the trading of cryptocurrency, especially Bitcoin, that’s led to its successful numbers. “The merger consolidates the combined group’s position in Argentina and provides an opportunity to build on a strong platform there and in our other key jurisdictions globally, including Australia, Japan and North America,” de Solay said. The ASX lithium sector has seen some takeover activity in the past year as companies seek economies of scale and project synergies in order to get positioned for the next boom.
ASX share price for Galaxy Resources (ASX:GXY), IGO (ASX:IGO), Orocobre (ASX:ORE) and Pilbara Minerals (ASX:PLS)
The 292,598,572 newly issued Orocobre shares are expected to commence trading on ASX on a normal settlement basis from Thursday, 26 August 2021. Orocobre announced that all approvals have been granted to complete the merger, which consolidates the two companies’ lithium portfolios, including assets in Argentina, Australia, Japan and North America. Markets coverage, company profiles and industry insights from Australia’s best business bitit review journalists – all collated and delivered straight to your inbox every day. Galaxy Resources recently completed a feasibility study for its Sal de Vida lithium carbonate project in Argentina, and operates the Mt Cattlin spodumene concentrate project in WA. Solay is to oversee the integration process for the new merged company and with its board, determine an optimal management team that draws from employees of both companies.
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“This transaction has the potential to be a significant value-creating opportunity for Galaxy and Orocobre shareholders,” said Galaxy Resources chairman, Martin Rowley, the new company’s non-executive chairman. Galaxy Resources shareholders will receive 0.569 Orocobre shares for each of their Galaxy Resources shares, leaving Orocobre shareholders with 54.2 per cent of the merged company and Galaxy Resources shareholders will own 45.8 per cent. This news comes just about two weeks after fxcm review Galaxy stock announced its earnings report. Further, the company believes it will see at least $400 million of income for the fourth quarter. Galaxy Resources and Orocobre have completed their merger and will rebrand as Allkem, setting the stage for the creation of one of the world’s largest lithium companies. Both Hubbard and Rowley are to step down from their roles as chairman and deputy chairman of the new company one year after the merger is implemented in August this year.
Galaxy stock may be down right now, but it’s not due to a major market selloff by investors. The cryptocurrency company selling $500 million in notes is what led to this drop in share price. The company moved from a market kvb forex cap of $3.29 billion on Friday to $3.05 billion as of writing. The new company will have an industry-leading growth profile and an enhanced financial position to optimise and accelerate development of its lithium assets.
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Galaxy Resources Limited engages in the production of lithium concentrate and exploration of minerals in Australia, Canada, and Argentina. Its flagship project is the Sal de Vida project located in Catamarca province, Argentina. As of August 16, 2021, Galaxy Resources Limited operates as a subsidiary of Allkem Limited.
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Orocobre has its Olaroz and Cauchari lithium carbonate projects also in Argentina, and the Naraha lithium-ion hydroxide conversion facility in Japan for 10,000 tonnes per year. “The merged entity’s growth opportunities in both brine and hard rock position it uniquely to take advantage of expected rising EV demand for lithium,” said Rowley. Participation in the merger will provide significant benefits to Galaxy Resources shareholders in being part of a larger diversified group and help to advance its projects’ development.
But this drop in share price to raise funds by offering a private secondary stock offering is great news for those wanting to buy on a dip. Galaxy stock created a dilution of shares by adding further shares to the market, resulting in a short-term loss. However, those wanting to get in now are likely to see long-term gains, as the company continues its growth trajectory.
