Beleaguered alternative-energy company Plug Power Inc. offered a positive funding update Tuesday morning, helping to send its shares soaring in premarket action.
Plug Power
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which provides hydrogen fuel-cell technology, finalized a term-sheet negotiation with the Department of Energy for a $1.6 billion loan facility, Chief Executive Andy Marsh said on an investor call Tuesday. The company has been experiencing liquidity challenges, issuing a going-concern warning late last year and disclosing approval for a stock-sale plan last week.
“This funding, when received, will support the development, construction and ownership of up to six hydrogen-production facilities, significantly advancing green-hydrogen deployment in the United States,” Marsh said of the new Department of Energy agreement.
At the same time, “addressing the critical issue of cash management and resolving our going concern is now our foremost priority,” he added.
Marsh also announced Tuesday that the company’s Georgia plant is now operational. “While the construction took slightly longer than expected, it still progressed at a pace unmatched by other projects of comparable size and complexity in our sector and will continue as we anticipate that our joint-venture plant in St. Gabriel [Louisiana] with Olin
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will start its operation in the third quarter of 2024, positioning us as one of the largest liquid-hydrogen producers globally,” he said.
Shares of Plug Power were up nearly 25% in Tuesday’s premarket action. The stock has eroded over the past year, plunging 84% over a 12-month span.
Chief Financial Officer Paul Middleton further detailed the company’s efforts to improve cash management and revenue performance.
Plug Power is “actively pursuing significant price increases across all our offerings, including equipment, service and fuel,” he noted on the call. “This is a paradigm shift, as we have historically not raised prices even during inflationary times when market rates have increased.”
Additionally, he said, Plug Power is in the midst of a hiring freeze and “will use attrition to naturally lower payroll costs.”
