Aug 27 (Reuters) - Lithium miner Galaxy Resources Ltd GXY.AX said on Tuesday it bought the $28.8 million dollar debt of troubled smaller peer Alita Resources Ltd A40.AX from a group of lenders led by fund manager Tribeca Investment Partners.
The acquisition makes Galaxy a secured lender to Alita as well as its largest equity holder, Galaxy's Chief Executive Officer Simon Hay said in a statement.
Alita Resources, formerly known as Alliance Mineral Assets Ltd, said last week it got a notice of default from the group of lenders for a A$40 million ($27.02 million) loan facility.
The default was due to a sharp fall in lithium spot price and weak demand for spodumene concentrate, a hard-rock mineral mined for lithium, among others, the lenders had said.
Market conditions for lithium, a key ingredient in the battery industry, have worsened because of lower demand from Chinese customers after a change in the country's electric vehicle subsidies and global trade tensions.
Alita is also under pressure as its key Chinese customer's biggest backer is facing financial troubles and the miner said on Monday it was in talks to sign new supply deals.
Alita was not immediately available for comment.
($1 = 1.4806 Australian dollars)
(Reporting by Aditya Soni in Bengaluru' Editing by Sriraj Kalluvila)
((Aditya.Soni@thomsonreuters.com; +91 80 6749 1130;))
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