The Magnis Energy Technologies Ltd (ASX: MNS) share price leapt 8% higher today amid a media report that the company is seeking funding to expand its lithium-ion battery plant in New York.
The Magnis Energy share price reached an intraday high of 40 cents today. That's 8.1% higher than yesterday's closing value of 37 cents. It is now trading at 38 cents, up 2.7%.
Here's what's going on.
What's the news pushing up the Magnis Energy share price?
Late last night, the Australian Financial Review published an article saying Magnis is "seeking equity investors to fuel expansion plans alongside a mooted US-government sponsored debt facility".
Magnis Energy asked the ASX for a temporary pause in trading before the market open today to give it time to prepare an official response.
What did Magnis Energy say?
In a statement issued just after 11am, Magnis Energy confirmed it has commissioned HSBC to assist with funding requirements.
The money will go toward expanding its lithium-ion battery plant, iM3NY Plant.
That stands for Imperium3 New York, Inc, which is a joint venture project between Magnis Energy's US subsidiary and its partner, technology company Charge CCCV LLC, otherwise known as C4V.
The goal of iM3NY is to commercialise C4V's patented technology to produce green-credentialed lithium-ion battery cells.
Why does the company need new capital?
According to the AFR, Magnis wants to ramp up production at iM3NY by more than 30 times before the end of the 2020s.
The article said HSBC is seeking to raise $300 million to fund the plant's expansion. This would enable it to increase production from one gigawatt per year to five gigawatts per year by 2024.
The company also want a $200 million commitment to support future expansion initiatives.
The longer-term goal is to achieve 38 gigawatts per year by 2030.
The funding could also help Magnis access US government backing. In recent times, the US has awarded grants to other ASX-listed lithium battery developers, namely Novonix Ltd (ASX: NVX) and Syrah Resources Ltd (ASX: SYR).
Magnis Energy is listed on the ASX, the Frankfurt Stock Exchange (FSE: U1P), and the OTC Markets Group (OTCQX: MNSEF).
The company said its board has not decided whether it will participate in any funding arrangements.
Magnis Energy share price snapshot
It may be a player in the white-hot lithium and battery materials sector, but Magnis has had a rough year on the market. The shares are down 33% in the year to date.
The Magnis Energy share price is also down 17% over the past five years.
