The Magnis Energy Technology Ltd (ASX: MNS) share price is bouncing today after news the company’s subsidiary has fully funded its lithium-ion plant.
Magnis announced that its subsidiary Imperium3 New York (iM3NY) has wrangled together US$85 million to fast-track the development of its lithium-ion battery plant.
Magnis also announced it has increased its investment in iM3NY. At a cost of US$23.6 million, it has increased its stake in the company from around 50% to approximately 63%.
The Magnis Energy share price reached an intraday high of 49 cents on the news, representing a gain of 13%, but it has since dropped back to 41 cents, down 3.53% on the previous session’s closing price.
Let’s look closer at the announcement the company made this morning.
Lithium-ion plant now fully funded for gigawatt production
The funding announced today means iM3NY can begin fast-tracking the production of its New York-based lithium-ion plant to gigawatt scale.
iM3NY expects the plant to be completed and capable of generating over 1 gigawatt-hour of high-grade lithium-ion battery cells each year by early 2022.
The plant will produce lithuim-ion batteries using iM3NY’s exclusive North American technology license agreement with Charge CCCV LLC (C4V), which means the plant will be the only one in North America able to produce the same battery.
Its first-generation batteries will use C4V’s patented bio mineralisation technology, combined with its proprietary bi-mineralised lithium mixed metal phosphate process.
According to the company, this will enable iM3NY to produce higher capacity, safer, longer cycling and lower cost batteries compared to all others on the market.
Currently, iM3NY is part of the US Department of Defence’s supply chain and supports the electrification of several large US companies.
The company believes the technology will allow it to grow quickly into international markets.
Magnis Energy’s chair Frank Poullas stated in today’s release that, due to its “aggressive future expansion plans” iM3NY is investigating its potential to list on a US stock market.
Funding sources
The US$85 million of funding has come from a number of sources.
$MNS‘ #iM3NY project is fully funded for Gigawatt scale production, securing US$85M 🔋🗽@im3_ny is in the right place at the right time to capture the enormous growth about to hit the globe for #lithium-ion #batteries. #Ausbiz $MNS.ax#ASX-announcement: https://t.co/8nJRVL2UWt pic.twitter.com/D9fNnTdchT
— Magnis Energy Technologies (@magnisenergytec) April 18, 2021
https://platform.twitter.com/widgets.js
The largest is Riverstone Credit Partners, which provided a US$50 million senior-secured term loan.
The other US$35 million came from equity funding, US$23.6 million of which was through Magnis Energy’s investment in the company.
Along with the funding announced today, iM3NY has US$230 million of manufacturing assets in place.
Further, Empire State Development has offered iM3NY performance-based incentives totalling US$7.5 million. These include a US$4 million Upstate Revitalization Initiative grant and US$3.5 million Excelsior Jobs Program tax credits.
Commentary from management
Pullas said today’s news comes after 2 years working to finalise the funding:
With offtake agreements signed and a focus on producing greener lithium-ion batteries, we are in a great position to take advantage of the huge growth being experienced in this sector.
iM3NY’s chair Dr Shailesh Upreti also commented on today’s news:
We now have the funds to turn our project in Endicott, NY into something special. We believe we are in the right place at the right time to capture the enormous growth about to hit the globe for lithium-ion batteries and being in the world’s largest economy with one of the country’s largest near-term battery plants bodes well for future growth plans.
Magnis Energy share price snapshot
The Magnis Energy share price is have a roaring year so far on the ASX.
Currently, Magnis Energy shares are up 121% year to date and a massive 770% over the last 12 months.
Magnis Energy has a market capitalisation of around $356 million, with approximately 838 million shares outstanding.
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.
The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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