- Total gross proceeds of $183.8M
at $3.54 per share
- New China joint venture and
$90M technology transfer program
VANCOUVER, Nov. 13, 2018 /PRNewswire/ - Ballard Power
Systems (NASDAQ: BLDP; TSX: BLDP) today announced that the Company
has successfully closed a strategic collaboration transaction with
Weichai Power Co., Ltd. ("Weichai"; http://en.weichaipower.com/),
initially detailed in a press release issued on August 29, 2018.
"This strategic collaboration with Weichai – a leading
automotive equipment manufacturer specializing in the production of
powertrains, automobiles, intelligent logistics, automotive parts
and components – underscores our high conviction in the opportunity
for Fuel Cell Electric Vehicles, or FCEVs, in China's Heavy Duty Motive market," said
Randy MacEwen, Ballard President and CEO. "We see our
collaboration with Weichai as an important validation of the FCEV
value proposition and Ballard's technology leadership in PEM fuel
cells. We expect our partnership to be a positive long-term
catalyst for Ballard's business and for shareholder
value."
Ballard's strategic collaboration with Weichai includes the
following key elements:
i.
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Equity
Investment – an equity investment in Ballard has been made by
Weichai in the amount of approximately $163.6 million, representing
a 19.9% interest in the company, through the subscription and
purchase of shares from treasury at a price of $3.54, which
reflects a 15% premium to the 30-day VWAP of $3.08 on August 29,
2018.
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In addition,
Zhongshan Broad-Ocean Motor Co., Ltd. – a current Ballard strategic
investor and Chinese partner ("Broad-Ocean";
www.broad-ocean.com/en/index.html) – has invested a further
approximately $20.2 million, through the subscription and purchase
of shares from treasury at the same price of $3.54 to maintain its
9.9% ownership position in Ballard.
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As a result, the
Weichai and Broad-Ocean equity investments in Ballard have
generated total gross proceeds of approximately $183.8 million. The
use of proceeds are expected to include investment in Ballard's
core fuel cell business, equity contributions to a joint venture
company ("JV") established by Weichai and Ballard to finance
Ballard's ownership position in the joint venture's operations, and
support of potential M&A transactions.
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The Weichai and
Broad-Ocean investments are subject to 2-year "standstill" and
resale restrictions (subject to customary exceptions). For so long
as Weichai holds at least 15% of Ballard's outstanding shares, it
will have the right to nominate two directors to Ballard's board of
directors, and Ballard will expand its board from the current seven
directors to nine directors. Weichai has also agreed that, in the
event of a third-party offer to buy Ballard, Weichai will have the
right to make a superior proposal or otherwise must vote its shares
in accordance with the Ballard board recommendation.
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ii.
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China Joint
Venture and Technology Transfer – Weichai and Ballard will
establish a joint venture company in Shandong Province to support
China's Fuel Cell Electric Vehicle market, with Ballard holding an
initial 49% ownership position. The JV will manufacture Ballard's
next-generation LCS fuel cell stack and LCS-based power modules for
bus, commercial truck and forklift applications with exclusive
rights in China and will pay Ballard $90 million under a program to
transfer technology to the JV in order to enable these
manufacturing activities. The JV will purchase Membrane Electrode
Assemblies (MEAs) for LCS fuel cell stacks exclusively from Ballard
under a long-term supply agreement.
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Weichai and Ballard
will fund pro rata shares of the JV based on an agreed business
plan. Weichai will hold three of five JV board seats and Ballard
will hold two, with Ballard having certain shareholder protection
provisions. Ballard will also retain an exclusive right to the
transferred technologies outside China.
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Broad-Ocean has also
expressed an interest in acquiring a 10% ownership position in the
JV, which would correspondingly reduce Ballard's ownership position
from 49% to 39%. Discussions regarding this investment are
currently underway between the parties.
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iii.
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Fuel Cell
Sales – Weichai intends to build and supply at least 2,000 fuel
cell modules by 2021 for commercial vehicles using Ballard
technology. Specific terms related to the scope of supply, product
mix, pricing and timing of shipments are under discussion between
the parties.
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Ballard is continuing discussions with the Synergy-Ballard joint
venture and other partners in China to address current issues and future
opportunities.
About Ballard Power Systems
Ballard Power Systems
(NASDAQ: BLDP; TSX: BLDP) provides clean energy products that
reduce customer costs and risks, and helps customers solve
difficult technical and business challenges in power and energy. To
learn more about Ballard, please visit www.ballard.com.
This release contains forward-looking statements concerning
future events or developments, including the closing of the
announced transaction, the performance of the joint venture,
anticipated product development efforts and product performance,
customer benefits and market demand for our products. These
forward-looking statements reflect Ballard's current expectations
as contemplated under section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Any such forward-looking statements are based on Ballard's
assumptions relating to its financial forecasts and expectations
regarding its product development efforts, manufacturing capacity,
and market demand.
These statements involve risks and uncertainties that may cause
Ballard's actual results to be materially different, including
general economic and regulatory changes, detrimental reliance on
third parties, performance risks related to existing joint venture
and partners, successfully achieving our business plans and
achieving and sustaining profitability. For a detailed discussion
of these and other risk factors that could affect Ballard's future
performance, please refer to Ballard's most recent Annual
Information Form. Readers should not place undue reliance on
Ballard's forward-looking statements and Ballard assumes no
obligation to update or release any revisions to these forward
looking statements, other than as required under applicable
legislation.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy securities. The Ballard Common
Shares have not been registered under the United States Securities
Act of 1933, as amended, or the securities laws of any other
jurisdiction and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
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SOURCE Ballard Power Systems Inc.