Battery technology and materials producer Magnis Energy Technologies (ASX:MNS) has received a binding funding proposal from US-based SBC Global Investment Fund to raise up to $50 million to progress the development of the US Anode Active Materials (AAM) Project and Nachu Graphite Project.
The company says the funding proposal will be structured as an equity linked pre-paid share subscription facility agreement. Following the previous pre-payment share subscription facility agreement entered into with SBC, and after considering various fundraising options potentially available to Magnis, the company believes the funding proposal represents the most beneficial fundraising structure available.
Under the funding proposal, SBC will provide Magnis with an initial $25 million, and potentially up to $50 million in consideration for the future issue to SBC the relevant number of new ordinary shares in the company.
The subscription price for the new Magnis shares and the subject of the potential future issue will be based on a 7.5% discount to a future observable volume weighted average price (VWAP) for Magnis’ shares on the Australian Securities Exchange (ASX).
Under this proposal, SBC will be issued 40 million new shares after Magnis receives the first $25 million pre-payment.
In addition, the total amount actually pre-paid by SBC will need to be either repaid by Magnis on the maturity date, or will need to be satisfied before the maturity date by the issue of new shares in Magnis at the subscription price.
The timing for all future issuances is at the discretion of SBC.
Magnis reports Evolution Capital will be paid a free equivalent to 3.75% of the total amount ultimately pre-paid by SBC under the pre-payment subscription facility and will be issued with 10 million options for intermediating the arrangements of the funding proposal.
SBC will be paid a fee equivalent to 1.75% of the total amount ultimately pre-paid by SBC under the facility and, regardless of whether any amounts are actually pre-paid, will also be issued with 25 million options subject to Magnis shareholder approval.
The funding proposal follows the recent announcement by Magnis of a binding offtake agreement with a tier-1 OEM to supply 17,500 tonnes per annum of AAM over a minimum term of 3 years.
Commenting on the funding proposal, Magnis Energy Technologies Executive Chairman Frank Poullas says: “Magnis is delighted to announce the funding proposal from SBC Global Investment Partners, which is expected to strengthen the company’s balance sheet and place it in a strong position to accelerate development of its vertically integrated AAM business.
This includes front end engineering and design studies at its upstream Nachu Graphite Project in Tanzania, engineering and feasibility studies at its downstream AAM Project in the US, as well as plant productivity enhancements and additional working capital for iM3NY to meet increasing customer demand.
“The recently announced binding offtake agreement with a global tier one electric vehicle OEM, provides a strong endorsement for the high-quality nature of Magnis’ AAM product and the company’s pathway to becoming a vertically integrated AAM producer”
The recently announced binding offtake agreement with a global tier one electric vehicle OEM, provides a strong endorsement for the high-quality nature of Magnis’ AAM product and the company’s pathway to becoming a vertically integrated AAM producer.”
Magnis reports the funds will be used to progress development of both the US Anode Active Materials project and Nachu project in Tanzania, as well as funding general working capital, and plant productivity enhancements at iM3NY as it continues to ramp-up commercial production to meet customer demand.
The company says the receipt of the funding proposal marks another ‘critical’ step towards its goal of becoming a leading global, vertically integrated player in the lithium-ion battery value chain.
Magnis Energy Technologies is a vertically integrated lithium-ion battery technology and materials company. The company’s US-based subsidiary Imperium3 New York (iM3NY) operates a gigawatt scale lithium-ion battery manufacturing plant in Endicott, New York.
Magnis also holds the Nachu Graphite project in Tanzania, which provides ‘high-purity’ feedstock to be used in the production of ‘high-performance’ anode active materials for lithium-ion batteries with its US-based technology partner C4V.
Images: Magnis Energy Technologies Ltd
