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Ener1 Receives Commitment for $65M Equity Investment; Negotiating with DOE on Low Interest ATVMP Loan

Ener1, Inc., parent of Li-ion manufacturer EnerDel, has executed an agreement with its principal shareholder, Ener1 Group, an investment vehicle established by Russian industrialist and entrepreneur Boris G. Zingarevich, for the purchase of common stock and warrants for $65 million. The investment is expected to close later this week.

Ener1 Group will purchase 18,678,161 shares of common stock and 8 million warrants. The warrants, three million of which are exercisable into Ener1 common stock at a strike price of $3.48, and five million with a strike price of $4.40, have a five-year maturity and are not exercisable for six months from the date of issuance. Zingarevich has also been appointed to the Ener1 board.

Ener1’s principal operating subsidiary, EnerDel, Inc., announced last month that it had achieved an important automotive-grade certification, Production Part Approval Process (PPAP), for THINK and had begun shipping battery packs to be installed in THINK vehicles for commercial sale in European and North American markets.

The new capital injection adds to funds from the US Energy Department (DOE) under the federal government’s Advanced Battery Manufacturing Initiative to ramp up production at EnerDel’s facilities in Indianapolis to a rate of 900 electric vehicle battery packs per month, a production point at which EnerDel expects to be EBITDA break-even.

EnerDel has also entered the term sheet negotiation phase with DOE on a long-term, low-interest loan under the Advanced Technology Vehicle Manufacturing Program.

The new equity injection for Ener1, Inc. comes on the heels of the company’s announcement last week of a manufacturing joint venture with Wanxiang Corporation, the largest tier-one supplier to the Chinese auto industry. This joint venture is expected to provide Ener1 with access to such potential Chinese customers as SAIC, Chana, Haima, Guangzhou and Yutong, the world’s second-largest bus maker. (Earlier post.)

Ener1 has also been engaged in negotiations with leading Russian companies interested in energy storage applications for the electrical grid specific to that region’s vast expanse and disparate population centers.

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