Critical Metals Corp. amended the exchange ratio for its European Lithium acquisition to a floating structure with a cap and collar, protecting both sides from volatility.
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Critical Metals Corp. (Nasdaq: CRML) changed the exchange ratio for its proposed acquisition of European Lithium Ltd., moving to a floating structure with a cap and collar. The amendment, detailed in a second deed to the Scheme Implementation Deed, replaces the fixed ratio of 0.035 new CRML shares per European Lithium share with a formula tied to the volume-weighted average price of CRML shares over 20 trading days ending two days before the shareholder vote.
Under the new terms, the ratio adjusts in a straight line between 0.045 and 0.025. If the scheme VWAP is at or below US$8.00, European Lithium holders receive the maximum of 0.045 new CRML shares per share. At or above US$16.00, the ratio drops to the minimum of 0.025. The companies said the change aims to share the impact of CRML share price moves between both sets of securityholders, protecting European Lithium holders from a falling CRML price and shielding CRML shareholders from dilution if the stock rises.
Based on the 20-day VWAP through the last trading day before the announcement, CRML shares traded below US$8.00, putting the current ratio at 0.045. The revised ratio also applies to European Lithium listed options and performance rights, the company said.
Mike Hanson, a board director of Critical Metals who leads the Special Committee responsible for the transaction, said the amended terms "reflect the continued commitment of both companies to completing this combination in a way that protects securityholders on both sides equitably against short-term market volatility." He added that the strategic rationale for the deal is unchanged.
Other material terms of the schemes remain the same. The Independent Board Committee of European Lithium continues to recommend the transaction. European Lithium expects to dispatch a scheme booklet, including an independent expert's report, in early September. Subject to shareholder and court approval, the schemes are expected to be implemented in October 2026.
Critical Metals holds the Tanbreez rare earths project in Greenland and the Wolfsberg Lithium Project in Austria, which it describes as the first fully permitted lithium mine in Europe.
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