Parkwalk portfolio company Ceres Power Holdings plc (AIM: CWR) has announced a strategic collaboration with China’s Weichai Power (“Weichai”) comprising both product development and launch as well as a potential initial £17.0m equity investment by Weichai in Ceres Power.
The long term strategic relationship provides Ceres Power with access to the Chinese market, the world’s fastest growing market for fuel cells. Initial plans are for Ceres Power and Weichai to jointly develop and launch a SOFC fuel cell range extender system for China’s fast growing electric powered bus market. Weichai has a wide network of customers in China with sales volume of c.30,000 buses per year.
The agreement potentially provides significant staged revenues to Ceres Power through engineering services and technology transfer, licence and royalty payments and a longer term share in the profits from a proposed manufacturing Joint Venture.
The agreement includes a potential initial £17.0m equity investment by Weichai in Ceres Power and a potential further equity investment of £23.2m, which is triggered on signing further commercial agreements before 30 November 2018, both subject to approval by provincial PRC (People’s Republic of China) governmental authorities and Ceres Power shareholder approval.
Weichai is listed in Hong Kong and Shenzhen with a market capitalization of c. US$10bn. It has a strong track record of making strategic investments in businesses around the world, such as its investment in Société Internationale des Moteurs Baudouin in France, Power Solutions International lnc. in the U.S., Linde Hydraulics GmbH & Co. KG and KION GROUP AG (MDAX-listed) in Germany, etc.
