Magnis in search to reveal details of battery factory iM3NY debt takeover

The troubled battery and graphite player has failed to keep track of key information, warning it knows nothing about new lenders on a failed project.

Staff at iM3NY, Magnis battery gigafactory in Endicott, New York. Picture: Supplied

Magnis Energy Technologies has failed in a bid to buy a $US100m ($147m) debt on its key American “gigafactory”, with the ASX-listed energy and graphite hopeful revealing to shareholders it has no idea who currently owns the loan.

In a market update on Friday, Magnis said it was chasing down rumours the debts on the gigafactory Imperium 3 New York, which the ASX-listed operation has poured nearly $100m into over recent years, had been sold.

Magnis told shareholders it was trying to grasp who now headed the factory, which the Australian graphite and energy hopeful lost control of in November 2023 after lenders called in the loan after repeated breaches of covenants.

The update revealed Magnis had written to the boss of its former business partner Charge CCCV, which it battled in a lengthy court squabble over control of iM3NY, demanding answers on who bought the debts on the factory. This came after it was “recently advised by a member of the public” that the debts on iM3NY had been sold “approximately four weeks ago”.

Magnis told investors it had written to iM3NY’s lawyers Weil, Gotshal & Mangles, a major US law firm, questioning the rumours. But Magnis said it then discovered Weil no longer acted for iM3NY and the debts on iM3NY had been sold to investment bank HSBC. Magnis said it also discovered that the independent directors appointed to iM3NY’s board had also been dumped and replaced by HSBC.

Investors were also warned Magnis was now trying to establish when the debt was sold, who bought it, and who now sits on iM3NY’s board.

The flagship battery factory was once touted by Magnis as worth a potential $4bn and commanding contracts to sell batteries worth hundreds of millions of dollars. This came as Magnis soared in value on the ASX, trading at its peak at a market capitalisation of more than $700m.

Magnis' iM3NY plant was hit by delays in May 2022. Picture: Supplied

Magnis told shareholders on Friday it had written to C4V chair Shailesh Upreti, who Magnis previously worked closely with in setting up iM3NY, “seeking further and better information, including details” of the deal. “To date the company has not received answers to its requests for information, however it will provide further details as they become available, in accordance with its reporting obligations.”

In its statement, signed off by Magnis chair Frank Poullas, the company noted it “retains its economic interest in Imperium3”, which previously peaked at more than 73 per cent “and as advised previously, reserves its rights”.

The latest developments mark a collapse of Magnis’s attempts to resecure control of iM3NY, which at times Magnis and its shareholders had boasted represented much of the value of the ASX-listed energy and graphite player.

Magnis told the ASX in January it had information sharing agreements with iM3NY, but revealed in October iM3NY’s controllers had cut the company off from any updates.

Magnis Chair Frank Poullas. Picture: Supplied

Magnis is currently facing legal action after the Australian Securities and Investments Commission alleged it repeatedly and deliberately misled investors over the disastrous manufacturing of batteries at iM3NY as well as its looming insolvency.

Magnis has also been unable to provide its full-year audited accounts to investors after warning in September the accounts, which covered its performance through to June 30, had been delayed due to “closing a liquidity transaction”. The company has also not called an annual general meeting, leaving it open to a $9900 penalty from ASIC if it fails to hold one by November 30.

Magnis revealed in October it had $114,000 cash at the bank and was being funded through loans from key shareholders including Mr Poullas and his brother, as well as a major $5.4m loan that falls due in January next year.

Mr Poullas and Magnis declined to comment.

Originally published as Magnis in search to reveal details of battery factory iM3NY debt takeover