Magnis yet to resolve $100m debt questions, dumps leadership at battery gigafactory

Magnis Energy Technologies has seized control of the board at its New York battery factory, amid uncertainty lenders will find the company in breach of covenants on a $100m loan.

Magnis' iM3NY plant has been dogged by delays.

ASX-listed battery player Magnis Energy Technologies has dumped the leadership of its New York battery factory as it negotiates with lenders over alleged breaches of covenants on a $100m loan.

In a market update on Tuesday, Magnis told investors it had replaced the chief executive of its gigafactory Imperium3 NY in upstate New York, seizing control of the board of the company.

Magnis said Giles Gunesekera would be put in as its third director on iM3NY’s board, giving the company majority control.

Mr Gunesekera joins Magnis directors Claire Bibby and Frank Poullas on the iM3NY board.

This is in addition to two directors from battery technology provider C4V, Mike Driscoll and iM3NY chair Shailesh Upreti.

Magnis controls 73 per cent of iM3NY after converting its bridging finance in the company into a heftier stake in July this year.

Magnis also revealed on Monday it had tipped out CEO Chaitanya Sharma, who joined in April 2021, replacing him with loyalist Wade Guindy in a suite of “management changes” that also saw iM3NY’s chief financial officer exit.

Wade Guindy, new CEO at iM3NY.

The company told investors Mr Guindy would bring “35 years of experience in C-Suite and executive management, operations, engineering, R&D and product development in the lithium-ion battery industry” to iM3NY.

“One of the first items of business for Mr Guindy is the appointment of a replacement chief financial officer, which is expected to occur within the next week,” Magnis said.

Mr Guindy has been involved with Magnis for some time, serving on its technical advisory committee and as chief operating officer at iM3NY since July.

IM3NY has been dogged by delays to production and sales.

Magnis was suspended from trade for almost a month after delays in securing sign-off of iM3NY’s accounts saw it pulled up by the ASX.

Atlas Credit Partners Post Oak Credit, which funded a $100m loan facility to iM3NY, called in Magnis last week over alleged breaches of several covenants on the debt.

Magnis said it was also reviewing multiple short and long-term refinancing options on the $100m loan, which was taken out to fund the construction of the iM3NY battery factory.

Magnis said it would advise the market when it concluded negotiations.

The lenders allege iM3NY has failed to make $3.3m in payments on the loan, secured against iMNY’s intellectual property, provided to it by C4V for exclusive use in North ­America.

The lenders also allege iM3NY owes suppliers at least $6.9m, with warnings the battery factory has failed to maintain working capital “in excess of an agreed minimum level”.

Magnis had been given until 5pm New York time to find a resolution “acceptable to the ­lender”.

A spokeswoman said Magnis had no update to offer on the loan.

Shares in Magnis closed up 23.5 per cent to 6.3c, giving the company a $61.17m market cap, but the shares are down 83.85 per cent over the past 12 months.

Originally published as Magnis yet to resolve $100m debt questions, dumps leadership at battery gigafactory