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Russia In-Focus: Ener1 Eyes $65 Million Of New Capital

June 3, 2010 (FinancialWire) (Go to http://www.financialwire.net/?s=ftrdnwswnd for all of today’s featured news.)– Ener1, Inc. (NASDAQ: HEV), a manufacturer of large-format lithium-ion battery systems for automotive and utility grid applications, said that it has executed an agreement with its principal shareholder, Ener1 Group, for the purchase of common stock and warrants for $65 million.

The investment is scheduled to close later this week.

Under the deal, 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.  

Ener1 Group is an investment vehicle established by Russian industrialist and entrepreneur Boris G. Zingarevich. Zingarevich currently sits on the board of a joint venture between a Russian manufacturing company he co-founded and International Paper, the largest pulp and paper company in the world.

Ener1's principal operating subsidiary, EnerDel, Inc., said last month that it had achieved an automotive-grade certification, Production Part Approval Process, for THINK, the maker of a pure electric vehicle, and had begun shipping battery packs to be installed in THINK vehicles for commercial sale in European and North American markets.

Ener1 said that the latest capital injection adds to funds from the U.S. Energy Department 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 said it 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, a tier-one supplier to the Chinese auto industry.

New York-based Ener1 develops and manufactures compact, high performance lithium-ion batteries used to power hybrid, plug-in hybrid and pure electric vehicles.

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