Plug Power, a provider of hydrogen fuel cell systems for material handling applications, announced a $6.5-million strategic investment from its partner Air Liquide, which includes a preferred stock purchase, increased ownership of the companies’ HyPulsion joint venture, and an engineering services contract.
Including this investment, the company has raised $12 million so far in 2013.
Air Liquide’s investment in Plug Power includes the following components:
A $2.6-million investment in convertible preferred stock with a 60% conversion premium to market and an 8% coupon. As part of this stock purchase, an Air Liquide representative will join Plug Power’s board. The parties have signed a Securities Purchase Agreement for the investment and the transaction is expected to close no later than 22 May.
Air Liquide also purchased from Plug Power a 25% ownership interest in HyPulsion for $3.3 million. HyPulsion is a joint venture between Axane, an Air Liquide subsidiary, and Plug Power to market hydrogen fuel cells into Europe. After the investment, Plug Power owns 20% of HyPulsion, but has the right to purchase a majority interest in 2018.
The companies have also signed a $659,000 engineering service contract in order to accelerate the development of the European market for hydrogen forklift with the Europeanization of key components.
Plug Power’s strategy is to grow its business of hydrogen fuel cells for forklift trucks and other horizontal markets. The company has seen sales of its GenDrive fuel cells increase by 36% in 2012. The products have been successfully deployed at customers such as Walmart, Sysco, P&G, BMW and Ace Hardware Corp.