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Alita Resources creditors approve rescue plan from potential new owners
THE creditors of Catalist-listed lithium miner Alita Resources have approved a deed of company arrangement (DOCA) from a Chinese firm for the acquisition of Alita's assets.
China Hydrogen Energy (CHE) and its Australian subsidiary Liatam Mining had proposed the DOCA this month. CHE is a special purpose vehicle for an unidentified Chinese party.
In Australia, a DOCA is a rescue plan that allows a company to restructure its debt and avoid insolvency. It is a binding arrangement between the company and its creditors governing how the company’s affairs will be dealt with.
Alita's deed administrators KordaMentha will apply to the Supreme Court of Western Australia to transfer 100 per cent of Alita shares to Liatam for nil consideration.
If successful, this will result in the delisting of Alita from the Singapore Exchange (SGX) and the Australian Securities Exchange.
The court will only approve the transfer of shares if it is satisfied that doing so will not unfairly prejudice the interests of Alita shareholders.
Information will be provided to shareholders in the coming days, including how they may oppose the share transfer application, KordaMentha said in an SGX filing on Thursday.
The DOCA will become effective after conditions precedent are satisfied. These include the court's approval of the share transfer, the establishment of two creditors' trusts, and the approval of Australia's Foreign Investment Review Board.
CHE and Liatam submitted their DOCA proposal after CHE provided a short-term A$70 million (S$65.3 million) loan to Alita to fully repay its defaulted A$40 million loan from Galaxy Resources.
Alita suspended trading of its shares on SGX on Sept 3, after going into voluntary administration. The counter last traded at 7.8 Singapore cents on Aug 8.