Saft intends, depending on market conditions, to raise approximately €120 million (US$177 million) in equity capital by way of an issue of preferential subscription rights to fund its lithium-ion battery plant in Jacksonville (Florida), the lithium-ion hybrid and electric battery plant of the Johnson-Controls-Saft JV in Holland (Michigan) and to reinforce its financial flexibility.
Saft made the announcement concurrent with its release of 3Q 2009 financial results: an 11.9% reduction in Q3 sales year-on-year to €123.2 million (US$182 million), and a 13.2% reduction at constant exchange rates.
Saft remains very focussed on its exciting medium term growth prospects, with high performance Li-ion batteries and is delighted that its projects have been chosen by the US Government to receive grants to build new factories in North America. These investments will have a major impact on Saft’s medium term growth and give Johnson Controls-Saft potential production capacity in the US to meet the needs of Ford and I hope other customers.
—John Searle, Chairman of the Management Board, Saft
Jacksonville. In August, Saft announced that it had been selected by the US Department of Energy (DOE) to benefit from a 50% funding of the project cost of up to $95.5 million on a $200 million investment, in order to build a high volume Li-ion cell and battery plant, subject to successful contract negotiation. The plant, to be based in Jacksonville, Florida, will manufacture batteries for a number of Saft’s existing markets (telecom back-up power, aviation and military), but most importantly, it will address the developing market for renewable energy storage.
Recent studies estimate the potential of this market to be very significant by 2015. Saft will complete this investment in 2012. The plant’s objective is to generate sales of up to $200 million per year in 2015 when running at full capacity.
In addition to the DOE grants, this investment has been selected to benefit from additional subsidies and tax credits from both the City of Jacksonville and the State of Florida totalling up to $20.8 million. The contract with the US DOE is anticipated to be signed before year end and construction would start immediately.
Johnson Controls-Saft. Johnson Controls-Saft’s industrial project in the US was selected in August to receive from the US DOE a 50% funding of the project cost of up to $299 million (including $13 million for a supplier of the joint venture), subject to successful contract negotiation. The initial investment by the joint-venture, estimated at $300 million, will be a facility in Holland, Michigan. In addition, this investment has been selected to benefit from subsidies and tax grants from the State of Michigan of up to $148.5 million, including $100 million of investment-related, refundable tax credit.
The plant’s objective is to generate sales of up to $450 million per year at full capacity. The contract with the DOE is expected to be signed before year end with again the investments to start immediately.
The Johnson Controls-Saft venture already has a facility in Nersac France, which is fully operational and currently produces Li-ion batteries for Mercedes and will very shortly produce for BMW. Production capacity is being expanded to meet demand in 2010.
Johnson Controls-Saft has also recently been selected by Volkswagen to supply battery products for a fleet of electric vehicles; by Jaguar Land Rover for an HEV development that should lead to a future production program; and by Ford for an electric commercial vehicle with Azure Dynamics.