(Tecpetrol, 22.May.2023) — Tecpetrol Investments S.L., a member of the Techint Group of Companies, has made a non-binding proposal (the “Offer“) to acquire all of the issued and outstanding common shares (“Shares“) of Alpha Lithium Corporation (NEO: ALLI) (OTC: APHLF) (German WKN: A3CUW1) (“Alpha” or the “Company“) a Canadian incorporated, headquartered and listed company, for cash consideration of C$1.24 per Share (the “Offer Price“). The Offer was presented in a letter that Tecpetrol submitted to the president and chief executive officer of Alpha on 15 May 2023.
Alpha refused to consider Tecpetrol’s proposal and did not engage with Tecpetrol following discussions between advisors. Through these exchanges, Tecpetrol indicated an ability to improve the financial terms of its Offer if Alpha would agree to give Tecpetrol access to expedited due diligence so that Tecpetrol could determine an appropriate increase in price based on its findings. Tecpetrol remains prepared to engage immediately in good faith negotiations with Alpha, improve the Offer based on due diligence, and complete the transaction expeditiously with support from Alpha’s board of directors.
Tecpetrol’s intention, in line with its energy transition strategy, is to sustainably develop these premium lithium assets as part of the integrated Western battery supply chain. The proposal is aligned with Canada’s critical minerals strategy, whose vision is to increase the supply of critical minerals and support the development of the domestic and global value chains for the green and digital economy.
Tecpetrol is a company incorporated in Spain that is part of the Techint Group, a conglomerate with a strong presence in Canada for more than 20 years, notably through Tenaris, the leading Canadian manufacturer and supplier of steel tubes for the Canadian oil and gas industry. Tecpetrol is fully committed to this opportunity and has put in place a comprehensive and highly experienced team to facilitate the execution of the transaction described above on an expedited basis.
Financial and Strategic Benefits of the Offer
Tecpetrol firmly believes that the Offer is in the best interests of Alpha shareholders and that shareholders should have the opportunity to determine what is best for their investment. Tecpetrol believes the significant benefits of the Offer include, among other things:
- Attractive Premium to Shareholders. The Offer implies an aggregate purchase price of approximately C$241mn for the company (on a fully-diluted, in-the-money basis) and represents the following premiums to the trading price of the Shares on the NEO Exchange for the period ending 12 May 2023:
- 26% premium to the 20-day volume weighted average price; and
- 13% premium to the closing price.
- Credible and Experienced Counterparty with Clear Path to Closing. The Techint Group is a large global industrial organization and has an extensive track record and reputation of completing large transactions in industrial and extractive sectors around the globe, including in Canada, and in navigating complex regulatory frameworks. The Techint Group’s strong integration in the western allied countries’ supply chains and significant presence and history of successful investment in Canada make it a credible transaction partner with a clear path towards obtaining any Canadian or other regulatory approvals and ultimately closing.
- Certainty of Value and Liquidity Through De-Risked Transaction. The Offer will crystallize full value for the company’s shareholders, providing them with immediate liquidity, and eliminates the exploration, development and execution risk associated with bringing the company’s properties into production.
- Standalone Plan Remains Challenging and Underfunded. The development of the company’s assets requires financing to fund a significant capital program (further diluting the company’s existing shareholders), and necessitates technical expertise given the development and execution risk.
- Tax–Efficient Structure. Tecpetrol is contemplating an acquisition of the Shares of the company, which provides a tax-efficient structure for the disposition of the Shares by shareholders.
- No Financing Condition. Tecpetrol has the financial resources necessary to satisfy the Offer in full with cash on hand and does not require external financing.
BMO Capital Markets is serving as financial advisor and Davies Ward Phillips & Vineberg LLP is serving as legal advisor to Tecpetrol. In addition, Crestview Strategy is serving as government relations advisor and Teneo is serving as strategic communications advisor.