Magnis sells US battery factory for just $16m

Magnis told shareholders its battery business iM3NY could be worth as much as $2bn, but liquidators sold it at bargain basement prices.

Magnis chair Frank Poullas is facing legal action.

Bankruptcy trustees have sold ASX-listed energy hopeful Magnis’s flagship American factory for $US10m ($16m) to Japanese car parts maker Musashi, which scooped up the sprawling lithium ion battery manufacturer in a fire sale.

The deal ends Magnis American battery hopes, after the company staked nearly $95m in shareholder cash on the Imperium3 New York battery “gigafactory”.

This is on top of $US100m lost on the battery factory by lenders Atlas Credit Partners, which backed a loan to fund the development of the upstate New York site.

Magnis revealed the sale to shareholders late on Tuesday, saying it was not certain of “the exact sale price or disposition of the proceeds” from the bankruptcy auction.

The factory had filed for bankruptcy on January 27, amid warnings iM3NY owed more than $US125m to lenders and funders.

The loss of iM3NY marks a new low for Magnis, which at its peak was worth more than $770m and one of a few ASX-listed hopefuls making a tilt at clean energy.

Magnis previously told shareholders iM3Ny could be worth as much as $2bn.

The company last traded in November 2023, after The Australian revealed it had withheld critical information from shareholders after years of missteps, including becoming embroiled with organised crime figures operating in Turkey.

Magnis chair Frank Poullas, who declined to comment, is facing legal action alongside the company after the corporate regulator took aim at Magnis over its disclosure failures.

The Australian Securities & Investments Commission alleges Magnis repeatedly and deliberately withheld essential information from shareholders, while continuing to tout the success of iM3NY despite knowing the battery gigafactory was in distress.

Magnis CEO David Taylor, right, resigned from his role.

ASIC claims Magnis knew iM3NY was not able to produce 10,000 cells per day and was crippled by manufacturing faults.

As revealed in The Australian, several key customers spruiked by Magnis claimed to have no connection to iM3NY or were in fact father-and-son operations run out of an East London townhouse, despite signing orders for $243m in cells.

Magnis is now seeking to be readmitted to the ASX, after telling investors it had signed a $10m deal with an American funder to bankroll its Nachu graphite project in Tanzania.

The deal, which would see Magnis dilute its existing shareholders by a third, is contingent on the company returning to trade. However, the ASX is known to be highly sceptical of allowing the energy hopeful back on the boards. Magnis would be required to issue a prospectus before any share placement.

The company has failed to file its full-year accounts, due in November last year, as well as its half-year results, despite repeatedly assuring shareholders they were imminent.

The company told shareholders on March 27 it would file its accounts in the coming fortnight. Magnis has shed directors and is on life support after securing a high-interest loan.