* Ener1 to take about 31 pct stake Think Global
* Deal includes supply agreement on batteries
* Financing deal will help Think resume production
By Poornima Gupta
SAN FRANCISCO, Aug 27 (Reuters) - U.S. lithium-ion battery maker Ener1 Inc said on Thursday it will take a 31 percent stake in Think Global, a move that would give the cash-strapped Norwegian electric carmaker another lease on life.
Ener1, which currently supplies Think with batteries for its electric vehicles, will invest about $18 million in three tranches, and convert $3 million in debt for preferred shares of the automaker.
The investment from Ener1 was part of a fund-raising round by Think, which received $47 million from a number of investors including Finnish Valmet Automotive, part of engineering firm Metso . and Norwegian government-backed investment fund Investinor.
The funds will help the Norwegian company resume production plans for its Think City all-electric vehicle, which can travel up to 112 miles on a single charge.
Think City's launch, originally planned for last year, was delayed after the company had to stop production and lay off workers due to severe capital constraints in late 2008.
Think said on Thursday it has exited court protection after the Norwegian courts approved its debt settlement plan.
Valmet Automotive, which will take a small share in Think. will now manufacture the Think City electric vehicle this year with planned production volumes at several hundred thousand cars per year. [ID:nLR90670]
Production at Think's existing assembly facility in Aurskog, Norway, will be suspended indefinitely because of the agreement with Valmet Automotive.
Think has said it is exploring the opportunity to launch its vehicles in the United States and is considering opening a a new U.S. manufacturing plant and technical center.
Small and large automakers, includingMotor Co and Motor Co , are racing to launch electric vehicle vehicles and plug-in hybrid versions in the United States.
Lithium-ion batteries are seen as the most practical option available now for electric vehicles as they have the higher energy density required to feed the electric motors that power the car instead of an engine.
Think's deal with Ener1 also includes a long-term battery supply agreement with Ener1 getting exclusivity rights to supply batteries for all of Think's current and upcoming new vehicle models.
(Reporting by Poornima Gupta; Editing Bernard Orr)