Alita debt holder Austroid moves to fire McGrathNicol as administrator
Austroid has moved to fire the administrator of Alita Resources as it battles to take control of one of Australia’s only in-production lithium miners.
The China-connected debt holder trying to take control of Alita Resources – one of Australia’s only lithium companies in production – is attempting to fire administrator McGrathNicol on the eve of a court decision about ownership of the miner.
Austroid, which snapped up the debt in Alita from a related party in 2020, has directed McGrathNicol to convene a meeting of creditors to remove it from its role and appoint KMPG instead.
“Austroid has directed deed administrators McGrathNicol to convene a meeting of creditors to consider various resolutions,” Austroid said in an email.
The other resolutions to be heard at the April 5 meeting aim to push back the sunset date for its deed of company arrangement to take control, because Austroid is yet to receive approval from the Foreign Investment Review Board and the Australian and Singapore stock exchanges – where it is dual-listed.
Given Austroid is the only creditor in Alita, which owns the Bald Hill lithium mine, it is expected these motions will be passed.
Just what McGrathNicol did to get Austroid off-side is unknown. The administrator would not comment and Austroid simply said it had the right to remove it.
The extremely rare move to fire an administrator is just the latest bizarre twist in the battle for control of Alita, which had no equity value when it failed in 2019, is now worth more than $1.5bn, and is currently shipping lithium to China for 70 per cent less than market prices, according to documents seen by The Australian.
Western Australia’s Department of Mines is continuing with its routine compliance inquiries on Alita and has asked for more information about the deal.
The Australian Taxation Office also has powers with respect to transfer pricing but would not comment on whether it was investigating Alita.
Questions have been raised because the director of Austroid who signed off on the contract to sell lithium, Mike Que, is the son of Que Wenbin, whose interests include the now delisted Sichuan Western Resources, which produces lithium batteries and other related products, according to Morningstar.
An Austroid spokesman said the only relationship between the two men was a familiar one and that neither was involved in the processing of lithium.
“They have no relationship with any refinery,” the spokesman said, adding that the company did not know what happened to its lithium once it was received by Yihe Cleantech Material.
“We are unaware what arrangements Yihe Cleantech Material Limited has for the lithium once we have delivered it,” the spokesman said.
Lithium from Alita’s Bald Hill mine is being sold to Yihe Cleantech Material for a maximum price of $US1500 per tonne, well short of the $US6000 per tonne being received by competitors.
Austroid has been waiting for FIRB approval to assume control of Alita for three years. This delayed process is why the equity holders now believe it is time to tear up the DOCA and liquidate the company, whose valuation has surged with the price of lithium. Liquidation would mean equity and debt holders both receive payment for the company.
Just what the regulator FIRB will do remains a mystery.