What's with the Magnis Energy share price on Thursday?

The company is seeking funding to expand its lithium-ion battery plant.

| More on:
A young woman sits with her hand to her chin staring off to the side thinking about her investments.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • The Magnis Energy share price reached an intraday high of 40 cents today
  • Magnis has asked HSBC to seek $300 million in funding from investors to expand its lithium-ion battery plant in New York
  • Magnis also wants a $200 million commitment from investors to fund future expansion plans 

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.

Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Hsbc Plc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Resources Shares

A happy construction worker or miner holds a fistfull of Australian money, indicating a dividends windfall
Dividend Investing

Everything you need to know about the Rio Tinto dividend

Shareholders are getting a big dividend.

Read more »

A miner in a hardhat makes a sale on his tablet in the field.
Resources Shares

Buy this ASX stock for 'the best lithium mine in the world'

The experts at Blackwattle reckon the battery material will come back into vogue soon, and these are the shares to…

Read more »

Miner looking at a tablet.
Resources Shares

The Fortescue share price is down almost 10% in February, time to buy?

Is this an opportunistic time to buy the miner?

Read more »

Two miners standing together.
Resources Shares

2 battered ASX mining shares to buy for cheap right now

The global economy is set to improve in the coming year. That's why one expert is seeing a huge 58%…

Read more »

A happy miner pointing.
Resources Shares

Will Fortescue stock be worth more than CBA by 2026?

The resources giant has done a wonderful job of growing. Can it keep going?

Read more »

a woman wearing a sparkly strapless dress leans on a neat stack of six gold bars as she smiles and looks to the side as though she is very happy and protective of her stash. She also has gold fingernails and gold glitter pieces affixed to her cheeks.
Resources Shares

This ASX gold stock just fell 31%. It's time to buy

The global market for the precious metal remains strong, so Blackwattle analysts advise looking past the recent sell-off of these…

Read more »

A girl holding a globe shouts into a green megaphone about climate change.
Resources Shares

ASX mining shares up amid Labor plan to spend multibillions on renewables revolution

Prime Minister Anthony Albanese will deliver a speech in Newcastle tonight.

Read more »

Miner looking at a tablet.
Earnings Results

South32 share price lifts off as ASX 200 miner greenlights US$2.2 billion project

ASX 200 investors appear optimistic about South32’s major US project approval.

Read more »