Novonix shares plunge 9pc amid speculation of a capital raising

Speculation of an imminent capital raising sparked a share price plunge and a trading halt for battery materials and technology company Novonix.

High-grade natural graphite is used in the anode material in lithium-ion battery manufacturing and therefore in virtually all electric vehicle batteries.

Battery materials and technology company Novonix’s shares plunged more than 9 per cent ahead of a trading halt that was sparked by speculation of a looming capital raising.

The company told the ASX it had made the trading halt decision after speculative media reports.

“The company has not made a decision regarding the capital raising and is pausing trading to manage disclosure obligations,” it said.

Novonix said the halt would remain until either an official announcement or trading resumes on Friday.

Shares in the Brisbane-based company, which hit $10.68 in late 2021, were 65c when trading was halted, having plunged 9.15 per cent on Wednesday morning.

There has been speculation of another capital raising, the first since February 2021 when it raised $131m, sparking a dramatic share hike before a share plunge, with a current market cap of $315m.

In May, Novonix announced that due diligence has been satisfactorily completed with Lithium Energy to merge their adjoining Queensland graphite assets into a spin-out company called Axon Graphite Limited through a proposed initial public offering,

Novonix said in April that Axon proposed to undertake its IPO to raise a minimum of $15m to $25m at an issue price of $0.20 per share.

Novonix’s Mt Dromedary Graphite Project is directly adjacent to Lithium Energy’s Burke Graphite Project, near Cloncurry in the north central region of Queensland.

Novonix said the combined mega project would create a substantial, world-class inventory of high-grade natural graphite, which is used in the anode material in lithium-ion battery manufacturing and therefore in virtually all electric vehicle batteries.

Axon would be a dedicated ASX-listed vertically integrated mine-to-battery product manufacturing company.

Lithium Energy and Novonix will each hold a 25 per cent cornerstone equity holding in the new company after the IPO, with the rest to be held by investors.

Shares in Lithium Energy closed down 8.51 per cent at 43c on Wednesday.

Last week Novonix completed an independent assessment of its Riverside production facility in Chattanooga, Tennessee, in the US, after announcing it would receive a $US103m ($155m) US tax credit to ramp up of production of critical battery materials.

It said the facility remains on track for its initial 3000 tonnes a year by the end of 2024 with all primary production equipment in place or ordered.

The US is pumping billions of dollars into a long-term plan to support clean energy manufacturing and critical materials processing under the Inflation Reduction Act.

The Biden administration is moving to wean the US electric vehicle battery chain away from China as it strengthens local supply chain in key sectors. Electric vehicle sales were forecast to hit a record 9 per cent of all passenger vehicles in the US last year.

In February, Novonix sealed a $153m deal to supply battery ­material, including 10,000 tonnes of high-performance synthetic graphite anode, to Japanese electronics giant Panasonic Energy.