GXY 0.00% 87.5¢ galaxy resources limited

News: GXY Australia's Alita Resources repays loan to top shareholder Galaxy Resources

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    Dec 2 (Reuters) - Australian lithium miner Galaxy Resources (GXY) on Monday said cash-strapped smaller peer Alita Resources (A40) had fully repaid its senior secured loan facility, sending the company's shares sharply higher.

    Galaxy bought $28.8 million worth of debt from the troubled miner earlier this year, making it Alita's largest equity holder.

    Alita, which is undergoing a wider restructuring, previously had defaulted on its debt to a group of lenders due to a sharp fall in lithium spot prices.

    Lithium miners are struggling as prices have plummeted this year due to global trade tensions and lower demand from Chinese customers after a change in the country's electric vehicle subsidies.

    The weakening sentiment in the electric vehicle and lithium-ion battery market also pushed Galaxy to cut production at its Mt Cattlin mine in October.

    Galaxy shares were trading up 2.4% at A$0.9475 at 0106 GMT, while the broader market (xjo) was 0.5% higher.

    Alita said on Friday it had entered into a A$70 million ($47.5 million) loan facility agreement with China Hydrogen Energy Ltd to pay back Galaxy.

    The total amount received by Galaxy on Monday was $32.5 million, including interest and costs, the company said in a statement.

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