REG - AFC Energy Plc - ABB Sale and Development Agreement

AFC EnergyAnnouncement

16/11/2021 07:05

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RNS Number : 4592S  AFC Energy Plc  16 November 2021

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16 November 2021

AFC Energy PLC

("AFC Energy" or the "Company")

 

ABB Places First £4m "S" Series Fuel Cell Order for Use in High Power
e-Mobility Charging

And

Subscribes for £4m of Warrants in AFC Energy

 

AFC Energy (AIM: AFC), a leading provider of hydrogen power generation
technologies, is pleased to announce the strengthening of its partnership with
ABB B.V. ("ABB") in the area of high-power e-Mobility charging through
execution of its first Sale and Development Agreement ("the Agreement") in
parallel with a subscription for new warrants in the Company.

Highlights

 •    ABB orders first AFC Energy "S" Series fuel cell system for high power
      e-Mobility charging with a total contract value of £4m.

 •    Proceeds of the £4m order will be paid over a combination of system
      deployment milestones; first upfront payment of £2m invoiced immediately.

 •    The Agreement fast tracks AFC Energy's high energy dense "S" Series anion
      exchange membrane ("AEM") technology with delivery now expected ahead of
      schedule.

 •    Final system procured by ABB to have nameplate capacity of 200kW and be
      capable of hydrogen and ammonia fuelling.

 •    200kW system to be engineered within 10ft shipping container (excl. ammonia
      cracker) illustrating market leading energy density of AFC Energy's alkaline
      fuel cell technology.

 •    Order follows the successful integration trials of AFC Energy's "L" Series
      fuel cell technology with ABB's energy storage and high power EV charging
      platforms over the summer of 2021.

 •    £4m subscription by way of warrants at an exercise price of 58.8 pence per
      share gives ABB the option to increase their shareholding in the Company ("the
      Warrant Subscription").

 •    Contracted delivery of "S" Series 200kW system scheduled for early 2023.

 •    Order builds on Joint Product Development Agreement and Commercialisation and
      Marketing Agreements signed with ABB in December 2020.

 •    200kW "S" Series product specification to complement parallel use cases in
      data centres, heavy duty motive (such maritime) and off-grid power markets
      where ABB and AFC Energy are also collaborating.

 •    Both ABB and AFC Energy are engaging prospective customers of the new "S"
      Series system, highlighting the customer pull for the fuel flexible, high
      energy dense system performance.

 

Frank Muehlon, President of ABB's E-mobility Division, said: "With the
accelerating transition to electric vehicles there is an increasingly urgent
need for additional fast charging capability and particularly in cost
effective areas that are not grid connected or where the grid is constrained.
Following our successful system integration in Europe over the summer, we
believe AFC Energy's new high power dense, zero-emission, hydrogen fuel cell
system to be an important part of our solution that will allow us to make EVs
accessible to everyone and further promote sustainable e-Mobility
globally."

Adam Bond, Chief Executive Officer at AFC Energy, said: "We are delighted to
receive our first "S" Series fuel cell system order from ABB, following twelve
months of high-quality collaborative work between our two companies. ABB's
£4m order enables AFC Energy to deliver a 200kW "S" Series charging system in
early 2023 which is a material acceleration when set against our previous
target of delivering a 10kW stack in the same period. AFC Energy is committed
to supporting ABB in delivering sustainable e-Mobility infrastructure to the
world's growing fleet of electric vehicles.  We believe our new "S" Series
fuel cell platform will become the "go to" high performance fuel cell
technology capturing multiple fuelling strategies, whilst affording best in
class AEM power density and efficiency".

 

 

Sale and Development Agreement - High Power e-Mobility Charging Applications

In December 2020, AFC Energy and ABB signed their first partnership
agreements to create the next generation of high power sustainable electric
vehicle (EV) charging solutions for grid constrained locations. These systems
are to be powered by AFC Energy's zero emission fuel cell technology.

The identified target market is ABB customers in regions where grid
connectivity is absent or constrained for high power EV charging - a challenge
becoming increasingly prevalent with the increase in vehicle electrification
and the growing demand for rapid charging capability.

Over the summer, both companies successfully delivered a fully integrated
charging system at ABB's packaging facility in Estonia.  AFC Energy's "L"
Series fuel cell technology was operated in conjunction with ABB's energy
storage and EV charging technology for the first time, validating the
operability and communications architecture developed by the companies in the
first half of 2021.

Following progress made by AFC Energy in delivering on its new high energy
dense "S" Series AEM fuel cell technology, ABB and AFC Energy have now entered
into a Sale and Development Agreement ("the Agreement") for the purchase of a
200kW hydrogen powered fuel cell generator.

The fuel cell generator is expected to demonstrate a market leading energy
density from an anion exchange membrane fuel cell and be housed in a container
approximating the size of a 10ft shipping container.  Importantly, the
generator will be able to utilise both hydrogen and ammonia (as a hydrogen
carrier) as its primary feedstock.

Proceeds received by AFC Energy under the Agreement will total £4m.  Of this
amount, £2m will be payable upon the signing of the Agreement, with two equal
remaining milestone payments receivable on validation of system performance.
Proceeds will be used to support the costs of system development and testing,
together with recovery of AFC Energy overheads and the system's overall
purchase cost.

The 200kW system will be deployed at a customer or corporate location of ABB's
choosing.

 

Warrant Subscription

To further align the interests of ABB and AFC Energy, ABB has been granted
warrants to subscribe for 6,802,720 Ordinary Shares in the Company at an
exercise price of 58.8 pence, being the market closing price on Friday 12(th)
November 2021.

The warrants vest across three contingent tranches linked to receipt by AFC
Energy of milestone payments under the Sale and Development Agreement,
including the £2m payment receivable upon signing.  The warrants have an
exercise period of twenty-four months from the date of each respective
tranche's vesting date.

Any shares acquired under the terms of the warrants must be held for a minimum
of 6 months following issuance.  The warrants will not be transferable and
will not be listed on AIM or any other exchange or market.

 

For further information, please contact:

 AFC Energy plc                                                         +44 (0) 14 8327 6726

 Adam Bond (Chief Executive Officer)                                    investors@afcenergy.com (mailto:investors@afcenergy.com)
 Peel Hunt LLP - Nominated Adviser and Joint Broker                     +44 (0) 20 7894 7000

 Richard Crichton / Tom Ballard / Alexander Allen
 M C Peat & Co LLP - Joint Broker                                       +44 (0) 20 7104 2334

 Charlie Peat
 Zeus Capital Limited - Joint Broker

 Daniel Harris (Corporate Finance)                                      +44 (0) 203 829 5000

 Dominic King (Corporate Broking) / Rupert Woolfenden (Head of Sales)
 FTI Consulting - Financial PR Advisors                                 +44 (0) 203 727 1000

 Sara Powell / Ben Brewerton                                            afcenergy@fticonsulting.com (mailto:afcenergy@fticonsulting.com)

 

About AFC Energy

AFC Energy plc is commercialising scalable alkaline fuel cell systems, to
provide clean electricity for on and off grid applications. The technology,
pioneered over the past twelve years in the UK, is now deployable in electric
vehicle chargers, off-grid decentralised power systems and data centre
applications with emerging opportunities across maritime and rail as part of a
portfolio approach to the decarbonisation of local electricity needs.

 

About ABB

ABB (ABBN: SIX Swiss Ex) is a leading global technology company that
energizes the transformation of society and industry to achieve a more
productive, sustainable future. By connecting software to its electrification,
robotics, automation and motion portfolio, ABB pushes the boundaries of
technology to drive performance to new levels. With a history of excellence
stretching back more than 130 years, ABB's success is driven by about 110,000
talented employees in over 100 countries. www.abb.com

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