SoftBank-backed Nemaska Lithium hits setback as bondholders walk away
September 18, 2019 12:19 pm by Henry Sanderson in London
A SoftBank-backed Canadian lithium project has hit another setback after bondholders with $350m in debt decided to withdraw their support following delays to its construction.
Nemaska Lithium said the bondholders would be repaid after it announced in July its mine in Quebec would be delayed beyond June 2021, in accordance with the original debt agreement with the company.
Nemaska is struggling to finance the developing of the Whabouchi lithium mine following a dramatic fall in the price of lithium, which is a vital ingredient in electric car batteries.
In July Nemaska said it is working with the Pallinghurst Group, a London-based investment fund, on a C$600m investment. Pallinghurst “remains willing to continue the due diligence for its proposed investment,” Nemaska said. Exclusive discussions will continue until October, it added.
Even if the Pallinghurst investment goes ahead Nemaska needs to raise C$230m, according to analysts at Canaccord.
Nemaska said it was working on a financing package for the mine and its partners SoftBank and Investissement Québec have been involved in the discussions.
“We have solid relationships with our strategic partners and stakeholders and are confident that we should be able to put everything in place to successfully complete the construction and commissioning of the project as expected,” Guy Bourassa, chief executive of Nemaska, said.
Shares in Nemaska have fallen by 57 per cent this year in Toronto to trade at 29 cents