Home / Sector / Materials Shares / Here's why the Allkem share price is falling on Tuesday

Here's why the Allkem share price is falling on Tuesday

The Allkem share price is down following another poor session for US lithium shares overnight.

Posted by
Bronwyn Allen
Bronwyn has 28 years of experience in journalism, copywriting, and media relations. She began her career as a reporter with News Corporation in Sydney in 1997. She later worked for two real estate corporations in communications and PR roles, then started her own freelance copywriting and publicity business. A keen shares investor, Bronwyn joined the Motley Fool Australia team as a copy editor and writer in June 2021.
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Key points
  • The Allkem share price is down 1.46% on Tuesday to $14.85 following another poor session for US lithium shares overnight
  • Allkem's United States merger partner, Livent has tumbled 9.86% over the past two trading sessions alongside other major US lithium stocks 
  • Allkem has announced a US$130 million finance facility for its Sal de Vida Project in Argentina today 

The Allkem Ltd (ASX: AKE) share price is down 1.46% on Tuesday morning to $14.85 amid the ASX lithium company releasing an update.

The weakness in the Allkem share price is likely related to the poor performance of lithium shares on Wall Street over the past two sessions.

This includes Allkem's United States merger partner, Livent Corp (NYSE: LTHM).

The Livent share price has tumbled 9.86% over the past two trading sessions to US$24.95.

This pushed the Allkem share price down 5.71% yesterday, as my Fool colleague James covered.

Allkem released a positive update on its proposed merger with Livent yesterday.

But let's move on to today's news.

woman standing at proposed lithium mine surrounded by native flora

Image source: Getty Images

What did Allkem announce on Tuesday?

Allkem has announced the signing of a project financing facility with the International Finance Corporation (IFC) for stage one of its Sal de Vida Project in Argentina.

The facility will provide up to US$130 million over a 10-year period. It consists of an A loan of up to $100 million and a B loan of up to $30 million.

The facility is "a green and sustainability-linked loan" in line with IFC's globally recognised environmental and social performance requirements.

Allkem says this provides "recognition and validation of the high ESG standards already adopted at Sal de Vida by Allkem".

Allkem says it is in discussions with another lender to increase the project finance facility by a further $50 million.

How are the merger plans progressing?

According to yesterday's release, the merger plans are progressing well.

Allkem and Livent have lodged antitrust/competition and investment screening/foreign investment regime notifications in all required jurisdictions.

In addition, the scheme booklet for Allkem shareholders is in progress.

Allkem recently appointed Kroll Australia to provide shareholders with the required independent expert opinion as to whether the deal is in their best interests.

The companies hope to complete their merger by the end of 2023.

Allkem share price snapshot

The Allkem share price is up 36% in 2023 and up 47% over the past 12 months.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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