China's Tianqi Lithium Corp has struck an agreement to extend the maturity dates on more than $3 billion in loans, it said after a last-ditch asset sale was enough to persuade lenders to give the company more time to pay.

The agreement eases the immediate financial pressure on Tianqi, one of the world's top producers of lithium chemicals used in electric vehicle batteries.

It was unable to repay almost $1.9 billion in debt last month following a drawn-out plunge in lithium prices but has since secured investment in its Australian operations from IGO Ltd.

The repayment deadline on two loan tranches totalling $1.884 billion, which were used to fund an acquisition in 2018, will be extended by one year to Nov. 26, 2021, Tianqi said in a Shenzhen Stock Exchange filing on Monday.

The agreement is pending approval by shareholders at a Jan. 5 meeting.

If the IGO investment is completed and Tianqi repays at least $1.2 billion of the loan principal, the deadline can be extended by one more year to November 2022, Tianqi said.

Interest payments on these tranches would be made every six months instead of every three months previously, it added.

The maturity date on a further $1.2 billion tranche originally due Nov. 29, 2022, will also be pushed back by a year, with the possibility of a further extension to November 2024.

Ratings agency Moody's said in a Dec. 14 note the proceeds from the IGO investment could help reduce Tianqi's adjusted debt by 22% over the next 12-18 months, although it kept its rating on the company at the Caa2 junk grade, with a negative outlook.

In a separate filing, Tianqi said its controlling shareholder, Chengdu Tianqi Industry Group, had cut its stake to 30.05% after completing the gradual sale of 6% of its holding first announced in May.