Magnis’ battery gigafactory sacks staff amid information blackout and debt deal flop
The ASX-listed energy and graphite player attempts to buy a $147m loan over its battery gigafactory iM3NY has fallen flat.
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ASX-listed energy and graphite player Magnis Energy Technologies has lost contact with its US battery “gigafactory” amid reports 50 staff at the manufacturing site have been sacked as attempts to refinance a teetering debt stack have failed.
Magnis told shareholders on Wednesday the majority of staff at its $210m Imperium3 New York battery factory, once touted as offering Magnis shareholders a $4bn opportunity, had been laid off.
This comes as Magnis told shareholders iM3NY’s management had given notice they would no longer be cooperating in an information sharing agreement, as several attempts to buy a $US100 ($147m) debt on the operation have fallen flat.
Magnis owns more than 73 per cent of iM3NY.
The battery gigafactory was supposed to churn out hundreds of millions of dollars in revenues using exclusive lithium-ion technology developed by researcher and iM3NY chair Shailesh Upreti.
However, no sales of cells from iM3NY have been made, with the company unable to commercialise its production of batteries amid manufacturing faults.
Magnis told the market in January it had “put arrangements in place” with directors of iM3NY “to enable the Company to keep the market informed of material matters occurring at the battery factory”.
But concerns have been building at Magnis for some time over the silence from iM3NY after the company lobbed its first bid to acquire the debts of the battery gigafactory, with Magnis having already pumped hundreds of millions into the business.
The company told investors it had since submitted three “underwritten offers” to acquire the debts, but had yet to secure ownership of iM3NY.
Magnis has been seeking to refinance the debt, held by US private lenders Atlas Capital, first revealing plans to do a debt deal in February this year.
Magnis told investors in July it had been invited to acquire the debts and “has secured firm commitments from investors and has submitted a bid to acquire the Secured Debt”.
In its latest update to shareholders, Magnis said it was still intent on acquiring the $US100m debt over iM3NY, a loan which has been in default since November last year.
“The Company is presently awaiting feedback from the debt holder as to whether it will proceed with the Company’s most recent underwritten bid,” Magnis said.
But Magnis also revealed it had been unable to refinance a ballooning $4.5m debt held with private lenders.
The loan, charged at a 54 per cent interest rate, was to fall due on Wednesday but Magnis announced it had again extended repayment terms to January 16 next year.
The company also spruiked a visit to its Tanzanian graphite mine site by new executive director David Wang, noting the Chinese-Australian businessman visited the project “with interested counter-parties who wish to work with the Company to develop the Nachu Project into an operating mine”.
Magnis has issued a number of missives over the years touting plans to kick off construction at the Nachu mine, telling investors on Tuesday that “discussions for off-take are also progressing with Chinese based end-users”.
Magnis chair Frank Poullas did not respond to requests for comment.
Originally published as Magnis’ battery gigafactory sacks staff amid information blackout and debt deal flop
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