FuelCell Energy, a leading manufacturer of ultra-clean, efficient, and reliable fuel cell power plants, today announced it has signed memorandums of understanding (MOU) pertaining to a series of strategic initiatives with its South Korean partner, POSCO Energy, designed to boost FuelCell’s global manufacturing presence.
“This strategic transaction reflects significant progress for FuelCell Energy and our ultra-clean stationary fuel cell power plants as we execute on our global growth plans, strengthen our balance sheet and drive to profitability,” Chip Bottone, president and CEO of FuelCell, stated in the press release. “This announcement will be welcomed by project investors as it expands the global manufacturing footprint for our Direct FuelCell products.”
Initiatives include a 120 megawatt (MW) multi-year order commitment; acceleration of deliveries under the existing 70 MW order; and a license commitment which provides for the manufacturing of Direct FuelCell® (DFC®) components in South Korea by October 2014.
Per the MOU, POSCO Energy will purchase 20 million shares of FCEL common stock at $1.50 per share for proceeds of $30 million, which will be allocated for general corporate purposes. POSCO Energy will also pay a one-time licensing fee upon execution of the agreement and an on-going royalty.
The expanded license agreement calls for the manufacture of Direct FuelCell components in Korea in a facility owned by POSCO Energy. POSCO Energy will also provide the land and building in Pohang, South Korea, for the manufacturing facility, as well as all necessary funding for construction and daily operation of the facility.
“We are experiencing increasing demand for ultra-clean baseload fuel cell power plants from electric utilities and independent power producers under the South Korean Renewable Portfolio Standard and we are projecting significant demand from the commercial building market in South Korea as well as exports to other Asian countries,” Soung-Sik Cho, president and CEO of POSCO Energy stated. “We are investing in increased capacity to meet this forecasted demand as the capacity of the existing FuelCell Energy production facility in the USA is not sufficient to meet our mutual global demand forecasts.”
FuelCell said it expects to close the transaction in April 2012.
For more information please visit our website at www.fuelcellenergy.com
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