The Magnis (ASX: MNS) share price jumped 15% this morning before retracing after the company reported on its over-subscribed placement.
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Shares in Magnis Energy Technologies Ltd (ASX: MNS) surged higher in morning trade following the company’s update regarding its heavily over-subscribed placement. The Magnis share price reached an intraday high of 38 cents this morning after emerging from a trading halt.
However, at the time of writing, some profit taking has led the company’s shares to retrace back to 33 cents, now flat for the day so far.
What drove the Magnis share price higher?
The Magnis share price was temporarily boosted today after the company reported a successful placement to fast-track its New York battery project.
According to its release, Magnis advised that local and overseas institutional, professional, and sophisticated investors took part in the placement. The firm commitments received will raise $34 million for the company through the issuance of 121,428,572 ordinary shares.
The offer price will be listed at 28 cents apiece and include a free attaching unlisted option with each share. The exercisable option will be at a strike price of 50 cents for each share applied. These options will have an expiry date of two years from the date of issue.
Due to current capacity limits, Magnis will split the placement into two tranches. The first portion will consist of 108,309,700 fully paid ordinary shares, for which the company will utilise its 15% capacity under listing rule 7.1.
The second tranche, comprising the remaining 13,118,872 shares and the entire unlisted options, will be conditional on shareholder approval. This is because the company has exceeded its maximum allocation of shares without a shareholder vote.
Magnis stated that the funds received from the placement will be put towards progressing its New York battery plant. It’s estimated that the iM3NY battery plant will move into production sometime later this year.
Once completed, the iM3NY project will be largest lithium-ion cell manufacturer in the United States. The plant is expected to produce up to 15 gigawatts aimed at servicing the global energy market.
The company also noted that along with the placement, it has obtained debt and equity facilities to continue project financing. It expects the loans to be readily available before the end of the current financial quarter.
Magnis chair Frank Poullas commented on the company’s update, saying:
We have been working hard to achieve this funding for our New York project and to become a significant global producer of lithium-ion batteries. Strong investor appetite for clean energy technologies was evident through the overwhelming demand for this raise.
Today’s announcement will allow us to fulfill our goal of bringing the iM3NY plant into production in 2021 and cementing our place is this exciting emerging industry.
Magnis share price snapshot
The Magnis share price has surged 200% over the last twelve months despite dropping to around 5 cents in May 2020. Magnis shares reached a 52-week high of 42 cents late last month. Based on the current Magnis share price, the company has a market capitalisation of around $240 million.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. 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 Bruce Jackson.