Liontown Resources Ltd (ASX: LTR) shares are on the move on Thursday.
At the time of writing, the lithium miner's shares are up 1% to $1.03.
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Why are Liontown shares making a move?
Investors have been buying the company's shares this morning after responding positively to the release of an announcement this morning.
According to the release, Liontown has executed amendments with auto giant Ford Motor Company (NYSE: F) to the debt facility agreement and spodumene concentrate offtake agreement from the Kathleen Valley Lithium Operation in Western Australia.
The company notes that the executed amendment to the facility agreement strengthens Liontown's near-term liquidity. That's because it will defer principal and interest due to Ford over FY 2026 for 12 months, with the principal to be repaid over the remaining term of the loan. All other conditions, including interest margin, term, and security, remain unchanged.
In addition, the 512,500 dmt to be delivered to Ford under the offtake agreement from 1 January 2027 onwards has been reduced to a total of 256,250 dmt.
No volumes will be delivered to Ford in calendar years 2027 and 2028. Ford also has the option to elect to be released from its take-or-pay obligations.
Management highlights that the changes to the offtake agreement will give Liontown the opportunity to place further volumes in the market, including giving it the ability to sell additional tonnes into the spot market to encourage transparent pricing or to pursue new strategic partnerships.
Liontown's managing director and CEO, Tony Ottaviano, was pleased with the amendments. He said:
The original Ford agreement in 2022 was instrumental in financing and developing Kathleen Valley. 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.
Should you invest?
Unfortunately, most brokers are feeling bearish about the lithium miner. For example, last week Macquarie put an underperform rating and 65 cents price target on Liontown's shares. This is almost 40% lower than its current share price.
Elsewhere, the team at Ord Minnet is almost as bearish. Its analysts recently put a sell rating and 70 cents price target on its shares. And UBS put a sell rating and 80 cents price target on them.
