Boston, MA 06/20/2014 (wallstreetpr) – Designer and manufacturer of fuel cell products, Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) has won a contract from Azure Hydrogen in connection with an assembly license for the Telecom Backup Power Systems to be installed in China.
Contract Value
Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) struck a definitive deal with Azure valuing the contract of about $6 million spreading over a period of 2014 – 15. Ballard Power Systems said that the licensing of its fuel cell intellectual property of deep portfolio and fundamental know-how is a key factor of the Company’s three-tier business model bundled with engineering services and product sales. The technical know-how included the recently purchased United Technologies Corporation (NYSE:UTX) IP portfolio that encompasses about 800 PEM fuel cell patents.
The company disclosed that fuel cell systems offer solutions for more reliable backup power for wireless telecom operators providing an attractive lifecycle cost. Ballard said that its fuel power generation system, ElectraGen portfolio, is driven by either direct methanol or hydrogen, and are specifically well suitable for the applications of extended duration runtime. These scalable, compact, systems provide important environmental and financial advantages when compared to the alternatives of diesel generators or lead acid batteries.
Management Speaks
Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) president and CEO John Sheridan said that the Telecom Backup Power sector is a key factor for its business growth opportunities and offers significant opportunity in China market in view of the market scale and the growing focus towards clean energy technology.
Aside from these, the agreement allows Ballard Power Systems to be the exclusive subsystems supplier, including fuel cell stacks of FCgen-1020ACS air-cooled and fuel processors. The company will receive a royalty payment for every system that Telecom Backup Power system sells in China, in the event of Azure successfully executing its business plan apart from achieving volume commitments.
Impact On Stock Price
Following the news, stock surged 8.9% at one point of time during the intra-day trading on Thursday to reach $4.52 with volume of 13.83 million shares changing hands compared to 3-month average volume of 5.98 million. However, the gain could not be sustained, and profit booking dragged down the stock to close 3.13% below the previous day closing price.
