Lithium Power International Limited (LPI) has announced that it has entered into a binding scheme implementation deed with Corporación Nacional del Cobre de Chile (Codelco) for the implementation of a scheme of arrangement under which Codelco will acquire 100 percent of the issued capital of LPI.

If the scheme is implemented, each LPI shareholder on the record date will receive A$0.57 in cash per LPI share from Codelco pursuant to the scheme.

The scheme consideration implies a fully diluted equity value for LPI of ~A$385 million.

Commenting on the proposed scheme, LPI’s chief executive officer and managing director, Cristobal Garcia-Huidobro, said:
“The transaction announced today provides LPI shareholders with an opportunity to realise an attractive cash amount of A$0.57 per LPI share, reflecting a compelling premium of ~119 percent over the closing share price of A$0.26 per LPI share on 26 September 2023, being the trading day prior to LPI's response to media speculation regarding discussions with Codelco. The transaction provides certainty for LPI shareholders when compared to a stand-alone development scenario of the company’s Maricunga Lithium Project and in the context of an uncertain economic outlook more broadly.

We believe this transaction is a great outcome for LPI shareholders and for other stakeholders including employees, suppliers and the people of Chile, all of whom will benefit from the Maricunga Lithium Project being developed by a large, well-financed and experienced mine developer and producer as Codelco.

The Board believes this transaction reflects the hard work and achievements of the LPI team and the significant progress made in advancing the Maricunga Lithium Project to its current predevelopment stage.”

Highlights announced Oct. 18 include:
• Lithium Power International (LPI) has entered into a binding scheme implementation deed with Codelco under which Codelco will acquire 100 percent of the share capital of LPI by way of a scheme of arrangement.
• Under the terms, LPI shareholders will receive A$0.57 in cash per LPI share.
• The consideration payable under the scheme implies a fully diluted equity value for LPI of ~A$385 million.
• The LPI Board unanimously recommends that LPI shareholders vote in favour of the scheme, in the absence of a superior proposal and subject to the independent expert concluding (and continuing to conclude) that the scheme is in the best interests of LPI shareholders.
• LPI’s major shareholder, Minera Salar Blanco SpA, intends to vote its 28.25 percent shareholding in LPI in favor of the scheme, in the absence of a superior proposal and subject to the Independent Expert concluding (and continuing to conclude) that the Scheme is in the best interests of LPI shareholders.

You can read more about the Maricunga project and the merger here

Photo courtesy of Lithium Power.