Danbury’s FuelCell Energy, which has faced significant financial troubles for several months, appears to have righted its ship via new arrangements with ExxonMobil and financial firm Orion Energy Partners.
FuelCell’s new two-year expanded joint-development agreement with ExxonMobil, worth up to $60 million, will focus efforts on optimizing the core technology, overall process integration and large-scale deployment of carbon capture products.
“ExxonMobil is working to advance carbon capture technologies while reducing costs and enhancing scalability,” said Vijay Swarup, vice president of research and development for ExxonMobil Research and Engineering Co. “This expanded agreement with FuelCell Energy will enable further progress on this unique carbon capture solution that has the potential to achieve meaningful reductions of carbon dioxide emissions from industrial operations.”
“We have a great opportunity to scale and commercialize our unique carbon capture solution,” added FuelCell President and CEO Jason Few, “one that captures about 90% of carbon dioxide from various exhaust streams, while generating additional power, unlike traditional carbon capture technologies which consume significant power.”
FuelCell has also entered an 8-year, $200 million strategic corporate loan facility with Orion Energy Partners. The Danbury company said it has already drawn down $14.5 million to repay outstanding construction loans with NRG Energy and Generate Capital LLC, as well as to fund certain outstanding stock dividends due next week.
Provided certain closing conditions of the deal are met, a second tranche of $65.5 million will be made available to FuelCell on Nov. 22. The company has announced those funds will be used to fully repay outstanding third-party debt as well as to pay for construction costs and other expenses related to some existing ongoing projects. Those include installations at Groton Naval Submarine Base, Central Connecticut State University, and the Long Island Power Authority, all part of a $1.2 billion deliverables backlog.
The two deals would seem to be the shot in the arm that FuelCell needed. In April, it eliminated 135 positions – a move it said would, along with recent retirements, save it $11.5 million annually in payroll – and last December Nasdaq issued a letter to the company warning that it could be delisted from the exchange if it continued to fall short of Nasdaq’s minimum price requirement of $1.
Restructuring efforts began last fall, resulting in the naming of several new members to its board. Those included Few, who was named president and CEO in August after Chip Bottone’s sudden departure from that post. Earlier this week, FuelCell announced it had concluded its restructuring efforts.