Jan 29 (Reuters) - Tianqi Lithium Corp on Friday said an unnamed entity would invest up to 16 billion yuan ($2.5 billion) in its controlling shareholder as the Chinese company continues to look for ways to pay down debt.
Debt-laden Tianqi, one of the world’s biggest producers of lithium chemicals used in electric vehicle batteries, managed in December to secure a $1.9 billion investment in its Australian operations from IGO Ltd and by extending the maturity of $3 billion of loans.
It is seeking additional funding to repay its debt, even as lithium prices start to stage a strong recovery.
In a filing on Friday, Tianqi said it had on Dec. 22 signed a “non-binding and non-exclusive memorandum” on a potential equity transfer with a party that plans to invest 10-16 billion yuan in Chengdu Tianqi Industry Group, Tianqi’s controlling shareholder, which has a 30% stake.
The investor has investment experience or strength in the lithium industry and plans to set up a private equity fund to make the investment, Tianqi said. ($1 = 6.4270 Chinese yuan renminbi) (Reporting by Tom Daly. Editing by Jane Merriman)