- 120 Megawatt multi-year Order Commitment and Delivery Under Existing 70 Megawatt Order to be Accelerated
- $30 Million Investment in FuelCell Energy Common Stock
- Manufacturing of Direct FuelCell® components to commence in South Korea by October 2014
DANBURY, Conn., March 12, 2012 (GLOBE NEWSWIRE) -- FuelCell Energy, Inc. (Nasdaq:FCEL) a leading manufacturer of ultra-clean, efficient and reliable fuel cell power plants, today announced the signing of Memorandums of Understanding (MOU) outlining a series of strategic initiatives with its South Korean partner, POSCO Energy (formally POSCO Power). These 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.
"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," said Soung-Sik Cho, President and CEO, POSCO Energy. "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."
Under the terms of the MOU, POSCO Energy will purchase 20,000,000 shares of FCEL common stock at a price of $1.50 per share for proceeds of $30 million. Proceeds will be used for general corporate purposes. The transaction is expected to close in April 2012.
"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," said Chip Bottone, President and Chief Executive Officer for FuelCell Energy, Inc. "This announcement will be welcomed by project investors as it expands the global manufacturing footprint for our Direct FuelCell products."
The MOU anticipates that POSCO Energy will order 120 MW of fuel cell kits for delivery starting in 2013 and concluding in 2016, all to be produced at the Torrington, Connecticut production facility owned by FuelCell Energy. Additionally, the MOU contemplates that the existing 70 MW order will be accelerated from 2.8 MW of fuel cell kits delivered each month to 4.2 MW per month, beginning in August 2012.
"The 120 megawatt order provides a committed level of production for our Torrington Connecticut production facility for the next several years, which provides certainty to our supply chain and increases capacity utilization," continued Mr. Bottone.
The expanded license agreement will provide for the manufacture of Direct FuelCell components in Korea in a facility owned by POSCO Energy. POSCO Energy will provide the land and building in Pohang, South Korea for the manufacturing facility along with all necessary funding for construction and daily operation of the facility. POSCO Energy will pay a one-time licensing fee upon execution of the agreement and an on-going royalty. The expanded license agreement is expected to be finalized in the Company's third quarter of 2012.
DFC power plants efficiently provide ultra-clean and reliable power at the point of use. The fuel cells utilize an electrochemical process to efficiently generate ultra-clean electricity and usable high quality heat. Due to the absence of combustion, virtually no pollutants are emitted. Avoiding the emission of NOx, SOx and particulate matter supports clean air regulations and benefits public health. The high efficiency of the fuel cell power generation process reduces fuel costs and carbon emissions, and producing both electricity and heat from the same unit of fuel further supports favorable economics while also promoting sustainability. Fuel cells can achieve up to 90 percent efficiency when configured to use the high quality heat generated by the power plant in a combined heat & power (CHP) mode.
FuelCell Energy management will discuss these strategic initiatives as part of the previously scheduled First Quarter 2012 earnings call at 10:00 am Eastern Time on March 12, 2012. The live webcast of the call will be available on the Company website at www.fuelcellenergy.com. To listen to the call, select 'Investors' on the home page, then click on 'events & presentations' and then click on 'Listen to the webcast.'
About FuelCell Energy
Direct FuelCell® power plants are generating ultra-clean, efficient and reliable power at more than 50 locations worldwide. With over 180 megawatts of power generation capacity installed or in backlog, FuelCell Energy is a global leader in providing ultra-clean baseload distributed generation to utilities, industrial operations, universities, municipal water treatment facilities, government installations and other customers around the world. The Company's power plants have generated more than one billion kilowatt hours of ultra-clean power using a variety of fuels including renewable biogas from wastewater treatment and food processing, as well as clean natural gas. For more information please visit our website at www.fuelcellenergy.com
The FuelCell Energy, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3284
This news release contains forward-looking statements, including statements regarding the Company's plans and expectations regarding the continuing development, commercialization and financing of its fuel cell technology and business plans. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Factors that could cause such a difference include, without limitation, whether the Company is able to reach definitive agreements on the terms contemplated in the recently announced memorandums of understanding with POSCO Energy, general risks associated with product development, manufacturing, changes in the regulatory environment, customer strategies, potential volatility of energy prices, rapid technological change, competition, and the Company's ability to achieve its sales plans and cost reduction targets, as well as other risks set forth in the Company's filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this press release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in the Company's expectations or any change in events, conditions or circumstances on which any such statement is based.
Direct FuelCell, DFC, DFC/T, DFC-H2 and FuelCell Energy, Inc. are all registered trademarks of FuelCell Energy, Inc. DFC-ERG is a registered trademark jointly owned by Enbridge, Inc. and FuelCell Energy, Inc.