FuelCell Energy in Danbury Back From Bankruptcy's Brink

DANBURY, CT — Bankruptcy now appears off the table for FuelCell Energy, Inc. The Danbury-based faltering alternate energy manufacturer has been thrown multiple lifelines in the form of deals with ExxonMobil and a new credit agreement with lender Orion Energy Partners.

In a July filing with the Securities & Exchange Commission, FuelCell warned of "significant short-term debt and other obligations currently due or maturing in less than one year which are in excess of the company's cash and current asset balance." As of yesterday, the company's outlook is far rosier.

As part of the ExxonMobil arrangement, announced Wednesday, FuelCell will provide exclusive research and development work for the gas giant, meant to advance the company's carbon capture technology over a two-year period. For its work on ExxonMobil's behalf, FuelCell will be entitled to $5 million upfront exclusivity and a technology access fee of $5 million, and research cost reimbursement of up to $45 million.

ExxonMobil and FuelCell began working together in 2016, collaborating on research to make carbonate fuel cells more efficient. The new and expanded agreement will move that research into best practices to optimize FuelCell's technology for use in large-scale industrial facilities such as refineries and chemical plants.

"Today’s announcement underscores our leadership position in fuel cell technology," said Jason Few, president and chief executive officer of FuelCell Energy. "We are excited to continue to work with ExxonMobil to tackle one of the biggest challenges that exists today. We have a great opportunity to scale and commercialize our unique carbon capture solution, one that captures about 90 percent of carbon dioxide from various exhaust streams, while generating additional power, unlike traditional carbon capture technologies which consume significant power."

The kick-save is a major feather in the cap of Few, 53, who was only recently brought on board to make exactly that kind of wizardry happen. The new CEO took the reins of FuelCell on Aug. 26, having previously served as President of Sustayn Analytics, a data visualization and analytics company.

On that same busy Wednesday, FuelCell announced a new, 8-year $200 million strategic corporate loan facility with Orion Energy Partners.

FuelCell Energy has already drawn down $14.5 million out of the first drop of $80 million to repay outstanding construction loans with NRG Energy and Generate Capital LLC, as well as to fund certain outstanding stock dividends due next week. Provided certain closing conditions of the deal are met, a second tranche of $65.5 million will be made available to FuelCell on Nov. 22. The company has announced those funds will be used to fully repay outstanding third party debt as well as to pay for construction costs and other expenses related to some existing ongoing projects. These include installations at Groton Naval Submarine Base, Central Connecticut State University, and the Long Island Power Authority, all part of a $1.2 billion deliverables backlog.

"We are pleased to announce this new partnership with FuelCell Energy, and look forward to supporting their continued growth as a world leader for reliable, low carbon, base-load distributed power generation," said Gerrit Nicholas, co-founder and managing partner of Orion Energy Partners, in a news release.

In all, Wednesday's news represents a startling turnaround for the scrappy manufacturer. Less than a year ago, FuelCell was at risk of being delisted from Nasdaq as its stock traded below $1 for thirty consecutive days.

What is good news for FuelCell is also likely good news for the local economies in Danbury, and Torrington where the company does its manufacturing. The molten carbonate maker had recently reduced output by 90 percent in a desperate bid to make ends meet while it bought some time. Production ramping up to meet commitments in Groton, New Britain and elsewhere may mean that Christmas is no longer cancelled for those recently laid-off employees.