Talks between FCE and POSCO Energy, failing to produce result

Jason Few, the CEO of FuelCell Energy(FCE), recently visited South Korea to negotiate Joint Venture), but returned home after failing to produce results.

FCE is known to have failed to reach a conclusion since FuelCell Energy proposed a terms of negotiation that was different from originally discussed MOU(memorandum of understanding) contract.

According to industry officials, FuelCell Energy suggested the negotiation first, but it could not carry on because FuelCell showed a different stance from what was originally discussed.

The person also mentioned it was not the first time FuelCell Energy demonstrated this kind of negotiation tactics.

As the negotiations between Posco Energy and FCE ended without any success, the domestic fuel cell industry guessed that the visit to Korea was for FCE to increase its stock prices before a general meeting of stockholders to be held on Dec. 13.

FCE stock prices have constantly fallen below a dollar dollar since mid-October 2018, causing the stock to face a delisting warning from the NASDAQ, but through stock consolidation in April 2019, it has stepped away from a crisis.

The company was warned about delisting from NASDAQ, however, overcame the crisis with stock consolidation happened in April 2019.

Nevertheless, the stock price kept declining and FuelCell was warned again for delisting in July 2019. Currently FuelCell Energy‘s stock price stays around half a dollar.

POSCO Energy initiated fuel cell business in February 2007 and collaborated with FuelCell Energy to make use of MCFC(Molten Carbonate Fuel Cell) technology owned by FuelCell Energy.

After POSCO Energy purchased $29 million worth of FuelCell Energy’s share to strengthen collaboration with the company, it bought another $55 million worth of stock.

However, a key component called ‘stack’ from FuelCell‘s MCFC showed its life expectancy below expected, resulting in a massive loss for POSCO Energy.

POSCO Energy recorded accumulated loss equivalent to 600 billion Korean won(￦) since it started fuel cell business. The loss would surpass well over 1 trillion won if the investments made for the business are counted.