Plug Power expects to make $150 million from leasing transactions
BETHLEHEM - Plug Power, the hydrogen fuel cell company, says it has lined up three sale-and-leaseback deals for some of its hydrogen storage and transportation equipment that will generate $44 million immediately for the cash-strapped firm.
Plug Power says it is working with an equipment leasing company called GTL Leasing, based in Tulsa, Okla. GTL specializes in leasing equipment used to store, transport and dispense hydrogen and compressed natural gas.
Plug Power says it expects to generate more than $150 million "in the near to mid-term" from the arrangement, which it says it can also use to help its customers finance new equipment. The company recently moved its executive offices from Latham to the Vista Technology Park in Slingerlands where it has built a large factory and office complex.
Specific financial details of the deals with GTL were not immediately disclosed beyond the revenue numbers. Plug Power worked with Goldman Sachs & Co. to negotiate the leaseback deals, which essentially monetize the company's hard assets.
"It provides for immediate capital with a path to additional capital over the near term, supports our growth in the green hydrogen sector, and aligns with Plug's financial and operational objectives," Paul Middleton, Plug Power's chief financial officer said in a statement.
Plug Power has been raising its prices, reducing expenses and seeking to raise additional capital amid a cash crunch. The company lost $262 million during the second quarter of 2024 on $143 million in revenue during the period. The company has never been profitable and has been spending more than it makes as it tries to expand its reach into the worldwide market for hydrogen fuel cells and clean hydrogen.
As of June 30, Plug Power had just $62.3 million in unrestricted cash, compared to $135 million at the end of 2023.
The company has spent nearly $7 million on severance payments this year to employees who have been let go as part of its restructuring plan.
Plug Power makes hydrogen-powered fuel cells that can be used to power vehicles, as well as buildings and data centers. The fuel cells emit just water and heat, no carbon, into the atmosphere when operating, making them ideal for combating climate change caused by fossil fuels.
While Plug Power makes a lot of revenue selling fuel cells to large corporate customers around the world that use them in forklift trucks in their factories, the company is also aiming to become one of, if not the largest, producer of so-called green hydrogen. Hydrogen is not readily available in the atmosphere and is typically manufactured from methane gas, a fossil fuel.
Plug Power, however, makes electrolyzer machines that extract hydrogen from water, cutting down enormously on carbon emissions in the manufacturing process. The company is building green hydrogen factories across the U.S. and in other parts of the world to be used by its fuel cell customers aiming to reduce their overall carbon emissions.
This story was originally published September 19, 2024, 8:31 PM.
