Ballard Power Systems (TSX:BLD.TO; NASDAQ:BLDP) has signed an agreement to sell its electric drive operations to Siemens VDO Automotive Corporation.
Electric drive operations are not core to Ballard’s fuel cell stack strategy; the technology has limited revenue potential but requires high cash consumption. The sale will generate proceeds of about US$4 million and will enable Ballard to reduce cash burn by US$10 million a year. The transaction is expected to close in January 2007.
“This transaction, the result of an extensive strategic review process, is consistent with our focus on our core fuel cell stack business and our commitment to continue to improve Ballard’s financial performance,” said John Sheridan, Ballard’s President and CEO. “Siemens VDO is an excellent fit with the Dearborn electric drive operations. Together with our Alliance partners, DaimlerChrysler AG and Ford Motor Company, we look forward to working with Siemens VDO on next-generation fuel cell vehicle development programs.”
With this transaction completed, along with the sale of its automotive system integration division in Germany in 2005, Ballard’s corporate structure and scope is now fully aligned with its core fuel cell stack strategy. “We are now solidly positioned to execute on our plans to grow value in the nearer-term markets of materials handling, residential cogeneration and back-up power, and longer-term opportunities with automotive fuel cell stack technology,” said Sheridan.
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