Ballard Monetizes Non-Core Investment for $44.5 Million
VANCOUVER– Ballard Power Systems (TSX: BLD; NASDAQ: BLDP) announced that it has closed an agreement effective today with a financial institution to monetize its rights under the Share Purchase Agreement with Ford Motor Company (Ford) relating to Ballard’s 19.9% equity interest in Automotive Fuel Cell Cooperation Corp. (AFCC). Ballard will receive total gross proceeds of approximately $44.5 million: a $37 million payment today and a further contingent payment of $7.5 million due upon 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.
Bruce Cousins, Ballard’s Chief Financial Officer said, “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”.
John Sheridan, Ballard’s President & CEO said, “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 $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.
Background
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 $65 million plus interest after January 31, 2013. The value of the monetization of the agreement with a financial institution was determined based on a number of variables, including Ford’s cost of borrowing, expected future London Interbank Offered Rates (LIBOR), time remaining to the Share Purchase Agreement’s maturity date and general market and other conditions. 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.
Lazard Freres & Co. LLC acted as a financial advisor to Ballard for the transaction.
About Ballard Power Systems
Ballard Power Systems (TSX: BLD; NASDAQ: BLDP) is a clean energy growth company with product leadership in fuel cell power solutions, initially on the material handling and stationary power markets. To learn more about Ballard, please visit www.ballard.com
