SK Ecoplant to invest $500M in Bloom Energy through expanded partnership
Bloom Energy (BE) and SK Ecoplant, an affiliate of South Korean conglomerate SK Group (SKM), announced the companies are expanding their existing partnership.
The partnership includes purchasing a minimum of 500 megawatts, or MW, from Bloom Energy, representing a $4.5B revenue commitment; co-creating two hydrogen innovation centers; and targeting an equity investment of approximately $500M.
Since the start of their strategic partnership three years ago, Bloom Energy and SK ecoplant have transacted nearly 200 MW of projects together totaling more than $1.8B of equipment and expected service revenue.
Over the next three years the companies will expand this existing business with contracts for at least an additional 500 MW of power between 2022 and 2025, representing approximately $4.5B in equipment and future service revenue.
Bloom Energy and SK ecoplant agreed to create Hydrogen Innovation Centers in the United States and South Korea.
The intent is to accelerate the global market expansion for Bloom Energy’s hydrogen fuel cell and hydrogen electrolyzer products.
The agreement also reflects both Bloom Energy and SK ecoplant’s enhanced commitment to a zero-carbon future and the further implementation of environmental, social and governance practices.
In addition, Bloom Energy and SK ecoplant agreed to strengthen their alliance through expanding business cooperation in global markets, which may include exclusive distribution rights in select new markets.
SK ecoplant will invest $255M in Bloom Energy by acquiring 10M shares of zero coupon, non-voting redeemable convertible preferred stock at a price of $25.50 per share.
SK ecoplant has the option to acquire a minimum of an additional 11M shares of Class A common stock at a 15% premium to the prevailing stock price at the time, which must be no later than November 30, 2023 and is subject to a maximum ownership of 15%.
Upon completion of SK ecoplant’s purchase of its second tranche, SK ecoplant will add a member to the Bloom Energy board of directors. SK will give an irrevocable proxy to vote its shares to Bloom Energy.
The investment is subject to customary closing conditions and regulatory approvals and is expected to close within 45 days.
To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.
This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.