Critical Metals Corp. said on 18 May that it had signed a binding scheme implementation deed to acquire European Lithium, its largest shareholder, through two interdependent Australian schemes of arrangement covering European Lithium's shares and listed options.
Why Critical Metals Corp. is buying European Lithium Ltd
European Lithium holds about 45.5m Critical Metals shares, or 31%, and 7.5% of the Tanbreez rare earths project. Critical Metals said removing the cross-holding would reduce dilution, increase its public float and make it more attractive to strategic investors, while consolidating 100% of Tanbreez would simplify decisions and financing. Chief executive Tony Sage called it a logical transaction with a strong strategic rationale.
“This is a logical transaction that has a strong strategic rationale”
Deal terms and financing
European Lithium shareholders were originally to receive 0.035 Critical Metals shares per share, with listed options exchanged on a cashless basis. Amendments replaced the CHESS depositary interest structure with direct share issuance, added a sale facility for small holders and introduced a floating ratio of between 0.045 and 0.025 shares, depending on Critical Metals' share price, under which European Lithium holders would own about 41% of the combined company.
Regulatory approvals and timing
Conditions include European Lithium shareholder and optionholder approval, court approval, regulatory consents and European Lithium holding at least A$330m of net cash and liquid assets. The Supreme Court of Western Australia ordered the scheme meetings on 15 September; the meetings were set for 22 October, with implementation expected in November rather than the September originally targeted.
Market context
European Lithium's main operating asset is the Wolfsberg lithium deposit in Austria, about 270km south of Vienna. At the end of March it held about A$306m of cash, against about $124m at Critical Metals.
