Magnis Energy Technologies Ltd (ASX:MNS, OTCQX:MNSEF) has secured a binding funding proposal from US investment fund SBC Global to raise up to A$50 million via a pre-paid share subscription facility agreement.
The funding proposal follows a binding offtake agreement with Tesla (NASDAQ:TSLA) for some 17,500 tonnes per annum of Anode Active Materials (AAM) over a minimum of three years.
Read: Magnis Energy Technologies inks Tesla offtake agreement for minimum 17,500 tonnes of anode active materials
MNS intends to use the funding to develop both its US Anode Active Materials Project and Nachu Graphite Project, as well as funding general working capital and plant productivity enhancements at iM3NY as it continues to ramp-up commercial production to meet customer demand.
Read: Magnis Energy Technologies advances certification process for lithium batteries produced at iM3NY plant
Strengthening company balance sheet
“Magnis is delighted to announce the Funding Proposal from SBC Global Investment Partners, which is expected to strengthen the company’s balance sheet and place it in a strong position to accelerate development of its vertically integrated AAM business,” Magnis Energy Technologies executive chair Frank Poullas said.
“This includes front-end engineering and design studies at its upstream Nachu Graphite Project in Tanzania, engineering and feasibility studies at its downstream AAM Project in the US, as well as plant productivity enhancements and additional working capital for iM3NY to meet increasing customer demand.
“The recently announced binding offtake agreement with a global tier 1 electric vehicle OEM, provides a strong endorsement for the high-quality nature of Magnis’ AAM product and the company’s pathway to becoming a vertically integrated AAM producer.”
The first A$25 million tranche of the funding proposal is subject to only customary conditions, with potential provision for a further A$25 million.
The subscription price for the first tranche’s 40 million new Magnis shares will be set at a 7.5% discount to a future observable volume-weighted average price (VWAP).