FuelCell Energy, S. Korean Company Expand Deal
By Marc Silvestrini, Waterbury Republican-American, Conn.
Feb. 22–FuelCell Energy Inc., which employs about 100 workers at a facility in Torrington, said Wednesday it has expanded a manufacturing agreement with Posco, its South Korean distributor and the world’s third-largest steel maker.
The companies also announced that Posco agreed to invest $29 million in FuelCell Energy by purchasing common stock at $7.59 per share, a premium over the stock’s average closing price of $6.72 per share in the 20-day period preceding the announcement.
The company’s stock closed at $7.80 on the Nasdaq exchange Wednesday, up 27 cents or 3.6 percent.
Posco expects to purchase about 3.8 million shares with its $29 million investment, giving it a nearly 7 percent stake in the company. Under terms of the 10-year manufacturing agreement, a Posco subsidiary called Posco Power, the largest privately controlled power producer in South Korea, will create a fuel cell sales and service organization and become a provider of FuelCell Energy’s Direct FuelCell power plants in Korea.
Fuel cell stack modules will be manufactured by FuelCell Energy in Connecticut and shipped to Asian customers. Posco Power will be responsible for manufacturing the non-fuel cell parts of the Korean-bound power plants.
The deal calls for Posco Power to pay FuelCell Energy a 4.1 percent annual royalty on fuel-cell related sales over the term of the agreement.
In addition to Korea, Posco Power has the right to sell Direct FuelCell power plants worldwide, except in North America, Europe, the Middle East and Japan.
Based in Danbury, FuelCell Energy makes electrochemical power cells that convert fuels such as natural gas into electricity, operating like large batteries.
The fuel cells run more efficiently than conventional power plants and without combustion; the primary byproducts are water and heat. FuelCell Energy’s power plants are being developed to power hospitals, schools, and hotels and for other large-scale applications.
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