- Ballard Power Systems Inc. (is getting out of the automotive fuel cell business in a move that will reduce the company's cash consumption and allow it to focus on its near-term opportunities.
Ballard chief executive John Sheridan said Thursday the company's strategic shift will reduce cash burn by $15 million a year and allow Ballard to focus its efforts on current commercial opportunities, such as forklifts and backup power.
"With a greater concentration on our commercial markets and stronger faster execution, those are key ingredients to stronger revenue margin growth," Sheridan told a conference call with analysts.
Though it is best-known for its fuel-cell powered buses and cars, the company has seen recent success in selling fuel cells to power forklifts and for backup power systems.
Under the deal, Daimler AG and Ford Motor Co. will return the 34.3 million Ballard shares they hold to the B.C.-based company which will cancel the shares, reducing its outstanding share base by about 30 per cent.
Ballard expected to record an estimated gain of $95 million to $105 million on the deal, which requires approval by a majority of the company's shareholders, excluding any votes cast by Daimler and Ford.
The Canadian company will transfer 113 employees, primarily in the research and technology development areas, to Daimler and Ford. This represents about 20 per cent of the Vancouver firm's workforce.
Sheridan said the company will also eliminate eight executive jobs including three vice-presidents.
The new private company managed and funded by Daimler and Ford will be located at Ballard's facilities. The automakers will contribute $60 million to the new company and Ballard will invest $60 million for a minority ownership position, but it won't be obligated to provide any ongoing funding.
Ballard will provide contract technical services and manufacture fuel cells for the private company on a profitable basis.