Extending their current offtake arrangement, WA Kaolin and Stanco International Corp. have completed a AUD $7.7m equity transaction at a significant premium of 17 cents per share. The purpose of this expansion is to penetrate additional kaolin markets located in the Asia-Pacific area.
The Australian Securities Exchange-listed WA Kaolin Ltd. (ASX: WAK) announce today an increased offtake and capital investment from Stanco International Corp, a premier raw materials distributor company in the Asia-Pacific area.
According to the terms of the subscription contract, Stanco will make investments of $7,739,411 and receive 45,525,951 fully paid ordinary shares of WA Kaolin at an issue price of $0.17 per share. This is contingent upon receiving approval of the Company’s shareholders and the Financial Industry Regulatory Board (if necessary). Through this deal, Stanco will acquire a 15% share in the company.
At a premium of 26% over WA Kaolin’s last trading price and a premium of 23.5% over its 10-day VWAP, the issue price of $0.17 per share was acceptable for Stanco invesment.
The company said the relationship with Stanco dates back many years and Stanco is currently their largest off take partner. They went on to say this agreement between the two companies is founded on the foundation of this long-standing relationship and the goals of both parties are aligned in this agreement, which will strengthen the collaboration and pave the way for a mutually beneficial partnership.
In the Asia Pacific region, Stanco International Corp. is very well-known for supplying their high-quality raw minerals to numerous industries, including the fibreglass, glassware, ceramic, papermaking, electric wire and cable, and iron and steel sectors.
Andrew Sorensen, the CEO of WA Kaolin, said:
We are delighted to welcome Stanco as a major shareholder of WA Kaolin following execution of this subscription agreement. We’ve had a supportive relationship with Stanco, our largest offtake partner, and this agreement signifies our shared vision of building WA Kaolin into a leading kaolin supplier into the Asian market.
Stanco International Corp. CEO Sean Hu made the following statement:
The strategic partnership with WA Kaolin is a significant step for Stanco to generate future growth opportunities in various kaolin-related industries. This key investment strengthens our portfolio of kaolin products and at the same time diversifies the supply chain risk. We are confident the collaboration will be a win-win for both companies and our valued customers.
