Magnis delays debt repayments as iM3NY peace deal expires

The battery and graphite company has delayed repayments on a $4.6m loan for the second time, as it faces a restart of court battles with its key tech partner C4V over control of their gigafactory.

Magnis US managing director Hoshi Daruwalla, and chair Frank Poullas and an unidentified woman arrive for their AGM. Picture: John Feder/The Australian

A peace deal between Magnis Energy Technologies and its key technology partner has expired, as the battery and graphite company revealed it remains unable to repay a $4.6m loan.

In a market update on Wednesday, Magnis revealed it had again extended the payback date of a $4.6m lifeline with a consortium of lenders to the end of April.

It is the second time that the former ASX darling has pushed out the terms of the loan, which Magnis locked in under a deal inked in December with 32 parties.

The extension of the debt deal from its March 31 deadline, which is secured against all the assets of Magnis, sees the ASX-listed company face a worsening of its financial position as the interest bill on the loan climbs.

The loan, charged at 5 per cent a month, has already seen Magnis rack up at least $920,000 in interest costs.

This is compared to the $500,000 in cash Magnis reported at its last set of quarterly results, before the company locked in the $4.6m lifeline.

The move to extend the debt deal comes as Magnis and its key technology partner Charge CCCV are set to lock horns again.

A peace deal signed between C4V and Magnis also expired over the weekend, putting in play the governance of the two company’s joint venture.

Magnis and C4V have spent years and hundreds of millions of dollars building the Imperium3 battery gigafactory in upstate New York.

But the two went to war in October last year, after the lenders on the factory called in a $US100m ($147m) loan citing multiple breaches by iM3NY, which had failed to pay suppliers and interest payments.

This saw Magnis intervene and attempt to remove C4V’s representatives at iM3NY and take over the battery factory.

However, Atlas Credit Partners, the lenders, responded and removed Magnis’ loyalists and took over the factory, reinstating C4V’s representatives.

C4V also moved to sue Magnis over its attempt to take over the battery factory, warning its moves to block a rescue deal had pushed the gigafactory close to insolvency.

This ultimately saw Magnis agree to a standstill with C4V over control of iM3NY, with the ASX-listed battery and graphite player confirming it would not seek to change the composition of the board until at least 31 March 2024.

Atlas Credit Partners also agreed to release $US3.3m from escrow to fund iM3NY and capitalise the interest owing.

But the peace deal between both sides has now expired, leaving the door open for Magnis and C4V to wage war over control of the gigafactory, amid signals from Magnis it will walk away from its investments.

Magnis told the ASX in recent correspondence it would seek to cast itself as a pure play graphite miner, marking down the almost $95m in assets at iM3NY to nil.

Magnis chair Frank Poullas did not respond to requests for comment.

Originally published as Magnis delays debt repayments as iM3NY peace deal expires