Delta Lithium Proposes Demerger with 63.7 Million Ballard Shares Distribution
Delta Lithium Limited has announced a proposed demerger involving an in-specie distribution of over 63 million Ballard Mining shares to eligible shareholders, pending approval at a June 30 meeting. This move will reduce Delta's stake in Ballard and set the stage for Ballard's eventual ASX listing.
- In-specie distribution of 63,669,413 Ballard shares on a 1:11.25 basis
- Shareholder approval required at June 30, 2025 general meeting
- Delta's Ballard shareholding to reduce to approximately 46-49%
- Ballard shares initially unlisted and considered speculative
- Sale agent to handle shares for ineligible overseas shareholders
Background and Transaction Overview
Delta Lithium Limited has unveiled plans for a significant corporate restructuring through a proposed demerger of its gold assets held within Ballard Mining Limited. Central to this transaction is an in-specie distribution of approximately 63.7 million Ballard shares to Delta's eligible shareholders on a pro-rata basis of one Ballard share for every 11.25 Delta shares held as of the record date. This distribution is contingent upon shareholder approval at a general meeting scheduled for June 30, 2025.
The demerger aims to separate Ballard’s gold-focused operations from Delta’s core lithium projects, allowing each entity to pursue tailored growth strategies. Post-demerger, Delta will retain a substantial minority stake in Ballard, estimated between 46% and 49%, depending on the final subscription levels under Ballard’s planned initial public offering (IPO).
Details of the Offer and Shareholder Impact
The offer involves a capital reduction in Delta, satisfied by distributing Ballard shares directly to eligible shareholders. Eligible shareholders are those with registered addresses in Australia, Canada, the European Union, Hong Kong, New Zealand, Singapore, Switzerland, the United Kingdom, and the United States. Shareholders outside these jurisdictions or classified as small shareholders without opting in will have their entitlements sold by a designated sale agent, with proceeds remitted after costs.
Importantly, Ballard shares issued through this distribution will not be immediately listed on the ASX. Ballard is currently an unlisted public company, and its shares are considered speculative investments. For Ballard to list on the ASX, a separate prospectus and admission process will be required. Eligible shareholders will receive holding statements for their Ballard shares following the distribution.
Regulatory and Advisory Framework
The transaction is governed by the Corporations Act and incorporates detailed disclosures through a short form prospectus referencing a comprehensive Notice of Meeting lodged with ASIC. The prospectus highlights the speculative nature of the investment and advises shareholders to seek independent financial advice. Legal and technical due diligence has been conducted by respected firms including Thomson Geer, SRK Consulting, and BDO Corporate Finance, with KPMG acting as auditor.
The prospectus also outlines the risks inherent in both Delta’s lithium projects and Ballard’s gold assets, emphasizing uncertainties in resource estimates, regulatory approvals, and market conditions. No financial forecasts for Ballard have been provided due to the early stage of its commercialisation and associated uncertainties.
Next Steps and Market Implications
Shareholders are not required to take any immediate action other than to vote on the demerger resolution at the upcoming meeting. If approved, the in-specie distribution will proceed, reshaping Delta’s capital structure and shareholder base. The move positions Ballard for its IPO and separate market listing, potentially unlocking value for shareholders by allowing focused management of distinct mineral assets.
For Delta, the demerger allows a clearer strategic focus on lithium projects, which remain central to its growth ambitions. However, the market will be watching closely how Ballard’s IPO unfolds and how the reduced stake impacts Delta’s financial and operational profile.
Bottom Line?
The demerger marks a pivotal moment for Delta Lithium and Ballard Mining, setting the stage for distinct growth paths but leaving investors awaiting shareholder approval and Ballard’s IPO progress.
Questions in the middle?
- Will shareholders approve the demerger at the June 30 meeting?
- What is the expected timeline and valuation for Ballard’s ASX listing?
- How will the reduction in Delta’s Ballard stake affect its financial outlook?
