2023-07-29 02:26:01
© Reuters. Ana Cabral-Gardner, presidente-executiva da Sigma Lithium
18/04/2023
REUTERS/Washington Alves
Por Ernest Scheyder
(Reuters) – Sigma Lithium is working with Bank of America (NYSE:) to coordinate negotiations with parties interested in buying it, said the chief executive of the miner, which produces the metal used to make electric vehicle batteries. , in an interview with Reuters on Friday.
Discussions over the deal come amid a shortage of lithium supplies. Sigma started production at the Grota do Cirilo hard rock lithium project in Brazil this year to supply about a quarter of its output to LG Energy Solution, with the rest destined for sale in the spot market.
Bank of America has been Sigma’s holding bank for some time and has held meetings for at least four months with parties interested in acquiring the lithium miner, said Sigma Chief Executive Ana Cabral-Gardner.
She added that the company “is focused on alternatives that value the importance of our shareholders’ social sustainability values.”
Bank of America declined to comment.
Bloomberg News reported in February, citing sources, that automaker Tesla (NASDAQ:) was considering a bid for Vancouver-based Sigma, which is listed on the US and has a market value of $4.2 billion.
“What I can confirm is that since the rumors began in February, management has continued to work to understand strategic alternatives to strengthen Sigma’s and Brazil’s unique environmentally competitive position in the middle of the global supply chain,” said Cabral-Gardner. She is also a managing partner at A10 Investimentos, which owns 44% of Sigma’s shares.
Cabral-Gardner said that while Bank of America is coordinating meetings with parties approaching Sigma, the company has yet to choose a bank to advise on any potential transaction.
“Maybe I’m not selling. Maybe I’m partnering with someone. I still don’t know what I’m doing,” Cabral-Gardner said in the interview.
“We need to find someone to marry, and when we find someone to marry, then we choose a priest,” said Cabral-Gardner, drawing an analogy between an M&A banker and a priest. “The priest will depend on who we marry.”
Cabral-Gardner added that Sigma does not plan to sell the Brazilian mine separately from the company itself.
“The company is the asset,” she said.
As demand for lithium is low in Brazil, which is focused on biofuels, the country exports almost all of its production.
Sigma has projected that the mine will achieve annual free cash flow of $455 million for its first phase of production. Eight analysts recommend buying Sigma stock and believe it should trade 28% above current levels, according to Refinitiv data.
(Reporting by Ernest Scheyder)
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