In the United States (US) FuelCell Energy, Inc., a leading clean energy company, has announced a new, 8-year US$200 million strategic corporate loan facility with Orion Energy Partners. The company is planning to leverage the initial October/November 2019 draws totaling US$80 million to primarily support the execution of certain projects within the company’s US$2 billion project backlog.
Specifically, the US$80 million of the facility will be deployed toward current construction and engineering costs associated with inflight projects, specifically Tulare BioMAT, Bolthouse Farms, and the CMEEC US Navy Base fuel cell plant. In addition, future growth, including commencing the construction of the first of three FuelCell projects with LIPA and increasing FuelCell Energy’s unrestricted cash balance through the monetization of the Company’s project portfolio and repayment of all short-term outstanding construction loan facilities and outstanding dividends for Series B Preferred shareholders.
We are pleased to close the new Facility with Orion Energy Partners. This successful transaction underscores the confidence Orion Energy Partners has in FuelCell based on its deep understanding of our business and our strategy, as well as the importance of the role our proprietary fuel cell technology plays in delivering a clean energy future. With this partnership, we have strengthened our balance sheet and have the funding we need to complete construction of several projects in process, continue to execute on our US$2 billion backlog and project awards while driving new sales growth, all of which will generate strong cash flow, noted Jason Few, President and CEO of FuelCell Energy.
The balance of the loan facility, or US$120 million, will be available over the first 18 months to invest in strategic growth, providing working capital as needed. The second tranche is subject to the conditions contained in the agreement.
In connection with the facility, FuelCell Energy has granted Orion Energy Partners warrants to purchase up to 20 million shares of the company’s common stock. 8 million shares of these shares are valued at the October 30, 2019 closing price, while the balance or 12 million shares are valued at a premium to the October 30 closing price.
We are pleased to announce this new partnership with FuelCell Energy and look forward to supporting their continued growth as a world leader for reliable, low carbon, base-load distributed power generation. This investment is a perfect example of Orion Energy’s focus on providing our partners with flexible, creative capital solutions while meeting our commitments to environmentally sustainable energy businesses and practices, said Gerrit Nicholas, Co-Founder and Managing Partner of Orion Energy Partners.