04/21/2006
Source: LOHAS Weekly Newsletter
Author: bizjournals.com
Russian investment firm Interros and Norilsk Nickel, one of the world's largest producers of nickel and palladium, plan to make a $217 million cash investment in Plug Power Inc., a developer of fuel-cell systems.
The investment will give the firms about 35 percent control of the Latham company. The investment is being made through Smart Hydrogen, a joint venture of the principal Interros investors and Norilsk Nickel, which was formed to participate in global hydrogen initiatives.
"We view this as a transformational investment for Plug Power," said Roger Saillant, the president and chief executive officer of Plug Power, (Nasdaq: PLUG - News). "After this investment closes, Plug Power will have approximately $285 million in cash and marketable securities and be well positioned to accelerate and broaden our business strategy. We are extremely grateful to our employees, investors, customers, partners and suppliers who collectively have positioned our company as a leader, enabling Plug Power to attract this ground-breaking investment."
The investment is expected to close this summer.
Vladimir Potanin, president of Interros, said his company began reviewing the fuel-cell industry a year ago and looking for the best companies to invest in.
"The result of this exhaustive industry review resulted in our approach to Plug Power and this transaction," he said.
The parties plan on looking at how Interros and Norilsk Nickel can add value to Plug Power in such areas as technology development and distribution. Norilsk Nickel, one of the world's largest suppliers of precious metals, expects to see significant benefit as the success of fuel-cell technology results in the broader use of palladium and platinum. In addition, Norilsk Nickel's mining activities and other operations in remote sections of Russia create significant need for reliable and affordable energy production, an end market potentially served by the use of fuel cells, Plug said.
"Norilsk Nickel has long supported fuel-cell technology research, and our investment in Plug Power demonstrates this commitment," said Michael Prokhorov, director general of Norilsk Nickel and a principal investor in Interros. "We believe in Plug Power's potential, and in the potential of the hydrogen economy and look forward to helping Plug Power continue its advancements in fuel-cell technology."
Plug Power expects to receive cash of $217 million in exchange for shares of Class B Capital Stock that are convertible into 39.5 million shares of common stock. The purchase price per share of common stock in the transaction, on an as-converted basis, is $5.50. The Class B Capital Stock will be a new class of stock that is economically equivalent to, and convertible into common stock. The terms of the Class B Capital Stock and the investment include certain approval and other rights and certain standstill and other restrictions. Pursuant to these rights, the investors initially will be able to appoint up to four of the eleven directors on Plug Power's board of directors.
In December 2005, the investors purchased approximately 2.7 million shares of Plug Power common stock from General Electric Co. Concurrent with the closing of the new investment, the investors are expected to purchase 1.825 million shares of Plug Power common stock from DTE Energy Foundation.
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