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FuelCell Energy secures $13 million in project financing

EditorNatashya Angelica
Published 04/30/2024, 02:14 AM

DANBURY, Conn. - FuelCell Energy, Inc. (NASDAQ:FCEL) has finalized a project financing agreement totaling $13 million with Liberty Bank and Connecticut Green Bank for two of its fuel cell projects in Derby, Conn. The deal, structured as back leverage financing, is backed by the projects' strong cash flows and the creditworthiness of the energy purchasers.

Liberty Bank has committed $6.5 million in senior debt, while Connecticut Green Bank has provided $3.0 million in senior debt and an additional $3.5 million in subordinated debt. The senior debt carries a seven-year term with a fixed interest rate of 7.25%, and the subordinated debt has a 14-year term with an 8% interest rate. After deducting transaction fees and reserves for debt service, FuelCell Energy received approximately $11.6 million in net funding.

Michael Bishop, FuelCell Energy's Executive Vice President and CFO, expressed gratitude for the partnership and the financial institutions' confidence in the company's fuel cell platforms. The financing is expected to support the company's global growth initiatives in clean energy.

Daniel Longo of Liberty Bank highlighted the projects' contributions to Connecticut's sustainability goals, and Bert Hunter of Connecticut Green Bank emphasized the significance of the nation's first community fuel cell project for the state's hydrogen fuel cell industry.

The financed projects include a 14-megawatt fuel cell park, the second-largest in the U.S., and a 2.8-megawatt baseload fuel cell project. Both projects are delivering Class I renewable energy to the Connecticut grid under 20-year power purchase agreements.

FuelCell Energy, known for its fuel cell technology platforms, operates globally to provide sustainable energy solutions. The company's fuel cell modules are manufactured in Connecticut using mostly U.S.-based materials and suppliers.

This financial move is based on a press release statement and reflects the ongoing support for FuelCell Energy's operations and the broader clean energy initiatives in Connecticut.

InvestingPro Insights

FuelCell Energy, Inc. (NASDAQ:FCEL) has recently secured a financing agreement that bolsters its position in the renewable energy sector. While the deal reflects confidence in the company's technology and projects, a deeper look into the company's financial health and market performance via InvestingPro provides a more nuanced picture.

InvestingPro Data shows a market capitalization of $393.4 million, indicating the company's size in comparison to its peers in the industry. With a negative P/E ratio of -3.31 for the last twelve months as of Q1 2024, investors can see that the company is not currently generating profits relative to its share price. Moreover, the revenue decline of -24.12% over the last twelve months suggests that FuelCell Energy is facing challenges in growing its top-line sales.

Among the InvestingPro Tips, two particularly stand out in the context of the company's recent financing news. First, FuelCell Energy holds more cash than debt on its balance sheet, which is a positive sign for financial stability and may have contributed to the confidence shown by Liberty Bank and Connecticut Green Bank in the recent deal.

Still, it is important to note that the company is quickly burning through cash, which raises concerns about its long-term financial sustainability, especially given that analysts anticipate a sales decline in the current year.

For readers looking to delve deeper into FuelCell Energy's financial health and market prospects, InvestingPro offers comprehensive analysis and additional tips. There are 15 more InvestingPro Tips available for FCEL at https://www.investing.com/pro/FCEL, which can provide investors with a more detailed understanding of the company's performance and outlook. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, offering valuable insights for informed investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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