(Reuters) - Australian lithium miner Galaxy Resources <GXY.AX> on Monday said cash-strapped smaller peer Alita Resources <A40.AX> 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 <.AXJO> 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.
(Reporting by Shruti Sonal in Bengaluru; Editing by Stephen Coates)
