Magnis signs new ’binding memorandum’ to sell batteries as debt distress lingers

Magnis has told investors a new sales deal is on hand, after the company inked a binding memorandum with Chinese battery-maker BatteroTech.

Magnis chair Frank Poullas. Picture: Britta Campion

ASX-listed energy and graphite player Magnis Energy Technologies has signed a new binding memorandum to buy and sell batteries, flagging plans to look at opening new factories, despite its burgeoning debt load and looming regulatory action.

In an announcement published on the Magnis website on Monday, but not released on the ASX, the company told investors it had inked a new deal with Chinese battery player BatteroTech.

Magnis said it had signed a binding memorandum of understanding with BatteroTech, the latest in a string of deals the company has inked over recent years, which it claimed were binding.

BatteroTech is a subsidiary of Chinese industrials group Tsingshan Industry, which trades heavily in nickel and stainless steel.

Magnis said under the binding memorandum it would purchase lithium battery cells, components and “stationary energy storage products” from BatteroTech.

Magnis told investors “Dr Yajun Chao of BatteroTech” was “impressed” by the company after “our interactions with Magnis including the recent visit by the Magnis chairman and managing director (USA)” Hoshi Daruwalla.

“There are many great synergies between the two companies,” Dr Chao said.

“Between our products and technical expertise along with Magnis’s contacts and reach into new markets, we see this agreement as a Win-Win for both companies.”

Magnis managing director (USA) Hoshi Daruwalla.

Magnis told its investors the deal would see BatteroTech become a “non-exclusive sales and technology partner” with the company spruiking the deal as set to deliver “immediate-term re-sale and joint development of turn-key projects using BatteroTech batteries”.

Magnis chair Frank Poullas said BatteroTech would be a “long-term technology partner that can work together with Magnis”.

He said the company would “assist Magnis in producing near term revenues with customers that Magnis has identified”.

However, Magnis has already faced the loss of all its existing customers from its current battery factory, Imperium3 New York.

The company revealed to the ASX the existing deals had all lapsed or been terminated amid turmoil at iM3NY after lenders stepped in to seize the factory after it defaulted on a $US100m ($147m) loan.

Magnis has also torched its relationship with current technology partner C4V after attempting to seize control of iM3NY.

Questions have previously been raised about Magnis’ battery customers, with a key offtake agreement held by Sukh Energy, a part-time operation run out of East London.

Magnis said it would also work with the Chinese company on identifying future battery manufacturing plants, noting plans from BatteroTech to boost its current manufacturing capacity from 34 gigawatts to 45 gigawatts.

However, this comes as Magnis is still seeking to resolve its debt load after the company rolled over the repayment on a $4.6m loan for the second time.

Magnis has racked up almost $1m in interest after taking out the loan, secured against all assets of the company, in December amid a cash crunch.

The loan is set to fall due at the end of April.

This comes after Magnis poured cash into iM3NY, which it developed with technology partner Charge CCCV.

The potential forays into building new battery plants would come as the latest in a number of commitments from Magnis to build sites, including a bid to build a gigafactory in Townsville as well as mooted plans for factories in India, Germany, and Turkey.

The ASX was contacted for comment.