Ballard monetizes investment in Automotive Fuel Cell Cooperation Corp. for US$44.5 million

Canadian-based fuel cell developer Ballard Power Systems has closed an agreement, effective December 21, with a financial institution to monetize its rights under the Share Purchase Agreement with Ford Motor Company relating to Ballard’s 19.9% equity interest in Automotive Fuel Cell Cooperation Corporation (AFCC).

Ballard will receive total gross proceeds of approximately US$44.5 million. This comprises an immediate payment of US$37 million, and a further contingent payment of US$7.5 million due on maturation of the Share Purchase Agreement on or before January 31, 2013. Ballard’s receipt of the contingent payment is subject to the financial institution’s rights in the transaction remaining unsubordinated.

‘Given the recent improvement in public debt market conditions and Ford’s credit rating, we believe that this is the appropriate time to monetize this non-core investment,’ explains Ballard's CFO, Bruce Cousins.

John Sheridan, President/CEO of the fuel cell company, adds: ‘The cash proceeds from this transaction bolster Ballard’s strong balance sheet, and strengthen our positioning to execute our clean energy growth priorities in backup power, supplemental power, distributed generation and motive power applications.’

Ballard expects to book a gain associated with this transaction of approximately US$34 million in its fourth quarter results. This transaction does not affect Ballard’s business relationships with AFCC, Daimler, Ford, and their affiliates. Ballard will continue to supply technical services and fuel cell components and modules. Lazard Frères & Co LLC acted as a financial advisor to Ballard for the transaction.

As part of the monetization agreement, Ballard has pledged its shares in AFCC and assigned its right to ‘put’ or sell those shares to Ford for US$65 million plus interest after January 31, 2013. All required approvals from Daimler AG, Ford and AFCC were received prior to the closing of this transaction. Ballard’s intellectual property rights are unaffected by this transaction.

Ballard Power Systems is a leading developer and manufacturer of fuel cell power solutions, initially on PEM fuel cell technology for the the materials handling and stationary power markets.

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