Ceres Power Holdings plc Weichai Power Strategic Investment Approved (3239S)
June 25 2018 - 2:01AM
UK Regulatory
TIDMCWR
RNS Number : 3239S
Ceres Power Holdings plc
25 June 2018
25 June 2018
WEICHAI POWER'S STRATEGIC EQUITY INVESTMENT IN CERES POWER
RECEIVES FINAL CHINESE APPROVAL
Ceres Power (AIM: CWR, "Ceres Power", "Ceres"), developer of the
SteelCell(R), a world-leading, low cost Solid Oxide Fuel Cell
(SOFC) technology, is pleased to announce that Weichai Power
("Weichai") has received relevant approvals from the People's
Republic of China (PRC) for its proposed equity investment in Ceres
announced on 16 May 2018.
-- Further to the announcement made by Ceres on 16 May 2018,
relevant competent authorities in the PRC have approved the
proposed equity investment by Weichai in the Company
-- The approval covers the initial investment of c.GBP17m to
take a 10% stake in the Company and is priced at 15.08p / share, an
18% premium to the date of the initial announcement
-- Approval also covers the additional potential equity
investment of cGBP23.2m which is conditional on the signing of
further commercial agreements before 30 November 2018
-- Approval marks a significant milestone before the formal
start of the relationship with Weichai, one of the leading
automobile and equipment manufacturing companies in China.
-- The parties will initially work on jointly developing and
launching a fuel cell range extender system for China's fast
growing electric powered bus market
The Company will now seek shareholder approval for authorities
to issue the Ordinary Shares arising from these investments, and
will shortly send out a Notice to a General Meeting.
As announced, the second potential equity investment of
c.GBP23.2m will be by way of warrant at an exercise price of
16.45p/share, a 29% premium on the market value at the time of the
initial announcement. This warrant will allow Weichai to hold in
aggregate a 20% equity holding in Ceres Power and will be
automatically exercised on the signing of the further commercial
agreements expected later in 2018, subject to certain
conditions.
Alongside the investment, Ceres and Weichai intend to enter a
broader strategic collaboration to jointly develop and launch a
SOFC fuel cell range extender system for China's fast growing
electric powered bus market. Weichai has a wide network of
customers in China with sales volumes of c.30,000 buses per year.
The strategic collaboration is currently expected to begin with an
initial Fuel Cell System technology transfer to Weichai in 2018 for
the development and demonstration of CNG fueled SteelCell(R) SOFC
hybrid electric buses in China by 2019. The parties then expect to
progress to further trials of multiple buses and SteelCell(R) SOFC
stack supply by 2020.
Weichai is listed in Hong Kong and Shenzhen with a market
capitalization of c. US$10bn, and has a strong track record of
making strategic investments in businesses around the world,
including Société Internationale des Moteurs Baudouin in France,
Power Solutions International lnc. in the U.S. and KION Group AG
(MDAX-listed) in Germany.
The low-emission public transport market in China represents a
major commercial opportunity for Ceres's technology. This is being
driven by the Chinese Government, which is stimulating this sector
through subsidies and Zero-Emission Zones designed to reduce air
pollution and carbon emissions, while increasing public health and
lower operating costs. In addition to these benefits and increasing
the operational range of electric buses, the Ceres Power range
extender has the advantage of being able to run on widely available
fuels such as CNG and does not rely on the roll out of hydrogen
infrastructure.
Phil Caldwell, CEO said:
"We are delighted to receive PRC approval for Weichai's
investment in Ceres. The strategic partnership with Weichai, with
its huge scale, leading market position and manufacturing
expertise, has the potential to bring considerable benefits to
Ceres and accelerates the commercial adoption of our technology.
Although focused on delivering fuel cell range extenders in
electric buses initially, this partnership provides us with
invaluable access to the Chinese market as a whole. This funding
will provide important growth capital for Ceres as we scale up the
business. We look forward to working alongside Weichai and our
other existing partners in developing our world-leading technology
and extending its commercial applications across a number of
markets and geographies."
For further information please contact:
Ceres Power Holdings plc
Phil Caldwell, CEO
Dan Caesar, Communications & Marketing Director +44 (0)1403 273 463
Zeus Capital - Nominated Adviser and Joint
Broker
Giles Balleny / Andrew Jones +44 (0)20 3829 5000
Berenberg - Joint Broker
Ben Wright / Mark Whitmore / Laure Fine +44 (0)20 3207 7800
Powerscourt
Peter Ogden/Andy Jones/Niall Walsh +44 (0) 20 7250 1446
The information contained within this announcement is deemed by
the Company to constitute inside information stipulated under the
Market Abuse Regulation (EU) No. 596/2014. Upon the publication of
this announcement via the Regulatory Information Service, this
inside information is now considered to be in the public
domain.
About Ceres Power
Ceres Power (http://www.cerespower.com/) is a world leader in
low cost, next generation fuel cell technology for use in
distributed power products that reduce operating costs, lower CO2,
SOx and NOx emissions, increase efficiency and improve energy
security. The Ceres Power unique patented SteelCell(R) technology
generates power from widely available fuels at high efficiency and
is manufactured using standard processing equipment and
conventional materials such as steel, meaning that it can be mass
produced at an affordable price for domestic and business use.
Ceres Power offers its partners the opportunity to develop power
systems and products using its unique technology and know-how,
combined with the opportunity to supply the SteelCell(R) in volume
through manufacturing partners.
About Weichai
Weichai is a Chinese state-owned enterprise listed on the Main
Board of both the Hong Kong Stock Exchange and Shenzhen Stock
Exchange with a market cap of over USD$10 billion. With over 74,000
employees and sales of more than 150 billion yuan in 2017, Weichai
is one of the most competitive automobile and equipment
manufacturing companies in China, producing more than 600,000
engines, 830,000 transmissions, 150,000 heavy duty trucks and
200,000 forklift trucks in 2017. Over 43% of its revenue comes from
overseas market.
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END
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