Sometimes the flow of news with regards to companies in the stock market can be overwhelming, and important information may get overlooked by investors. However, it could be a mistake to overlook the developments pertaining to Edison Lithium Corp. (OTC:EDDYF) on Tuesday. The company announced yesterday that it had been awarded conditional approval for its proposed plan to spin out its cobalt assets located in northeastern Ontario by the TSX Venture Exchange. The assets are collectively referred to as the Kittson Cobalt Property.
The spin-out would be achieved as per the arrangement agreement that would be made between Edison Lithium Corp. and Edison Cobalt Corp., the spin-out company and a fully owned subsidiary unit. However, it ought to be noted that the spin-out would only be concluded subject to the agreement regarding the terms of the arrangement agreement, approval from the shareholders of Edison Lithium Corp. at a meeting, final acceptance by the exchange, and the approval of the British Columbia Supreme Court.
Once all the above things are in place, the assets of the Kittson Cobalt Property would be moved to Edison Cobalt Corp. in exchange for shares in the latter. The shares in the spin-out company would be awarded to the shareholders in the company on a one-on-one pro-rated basis. The company also noted in its news release that the spin-out would not result in any change in the holdings of its shareholders.
Once the spin-out is completed, the shareholders will hold shares in both entities. Additionally, Edison Lithium Corp. also stated that it expected the move to boost shareholder value by providing the capital markets with the possibility of assigning valuation to the Kittson Cobalt Property independently. The valuation would not be linked to the lithium properties of the company. The Chief Executive Officer of Edison Lithium Corp., Nathan Rothstein, spoke about the development on Tuesday as well. He stated that everyone at the company was happy at the fact that it had now become possible for Edison Lithium Corp. to offer two ‘pure play’ options in the fast-growing battery metals sector.
On November 2, the company hit the news cycle after it announced that it had been successful in the acquisition of 100% interest in four sodium brine properties based out of Saskatchewan. The four properties acquired by Edison Lithium Corp. are located in Freefight Lake, Ceylon Lake, and to the south and north of Cabri Lake. The acquisition of the properties would allow Edison Lithium Corp. to make a strong move into the growing importance of sodium-ion batteries as an alternative to lithium-ion batteries.
At the time, Rothstein noted that the world’s biggest manufacturer of electric vehicles, BYD, had three models that ran on lithium-ion batteries. He went on to note that the biggest Chinese manufacturer of electric vehicle batteries, CATL, had also produced a lithium-ion battery. He concluded by stating that there was a positive trend in favor of sodium ion batteries.
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