Liontown to reduce offtake volumes and defer repayments to Ford
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The news: Lithium producer Liontown Resources has agreed to changes to its debt facility and offtake agreements with Ford Motor Company, which will see Liontown defer repayments and reduce volumes delivered to the US carmaker.
The context: Liontown said the amendment will support the company's near-term liquidity, while all other conditions relating to the debt facility will remain unchanged.
Liontown will defer principal and interest repayments to Ford by one year, with the first payment date moved from 30 September 2025 to 30 September 2026.
The lithium miner will also halve the volumes of spodumene concentrate delivered to Ford under the company's existing offtake agreement. Liontown, which was set to deliver 512,000 dry metric tonnes (dmt) to Ford from 1 January 2027 onwards, will now deliver a total of 256,250 dmt.
Ford also has the option to be released from its take-or-pay obligations over the delivery volumes.
Liontown said the changes to the offtake agreement will allow the company to place more volumes in the market. This includes having the option to sell additional tonnes into the spot market or to pursue new strategic partnerships.
What they said: "The original Ford agreement in 2022 was instrumental in financing and developing Kathleen Valley," said Liontown's managing director and CEO Tony Ottaviano.
"With production now underway, these amendments mark the next phase of our relationship.
"For Liontown, this agreement provides improved near-term balance sheet liquidity, retaining our debt facility with Ford, while giving the company strategic flexibility to sell greater volumes of spodumene concentrate via spot sales or to new strategic customers as the lithium market continues to evolve."
The source: ASX
