Power Plug, the energy solutions company, has closed a long-term loan facility for up to $40 million with the specialist structured debt provider, Hercules Capital.
The money provided from the loan is stated to be used for working capital and other corporate needs. The loan has a three-year term, and is secured by a first priority all-asset lien. There will be interest charges of 10.45 percent annually. The joint advisors on the deal were Genuity and Oppenheimer & Co.
Plug Power looks for strategic partner
Plug Power is a Latham, NY, company that works in the design and manufacture of hydrogen and fuel cell systems that can remove the need for traditional batteries in electrical equipment. The company says the products increase productivity, reduce costs and lower carbon emissions.
Plug Power CEO, Andy Marsh stated, “Hercules Capital is a great strategic partner to align with given their experience, size and ability to play an evolving role as Plug Power continues to grow.” He continued, “Our primary goal for both current and future capital initiatives is to leverage the best overall financing solutions that provide liquidity and overall economics, while avoiding equity dilution of Plug Power’s shareholders.”
Hercules Capital is a Palo Alto, CA, finance company that specializes in providing structured finance to companies within the technology sector. Since the company started in 2003 it has committed nearly $6 billion to over 350 businesses.
Financial plans for Plug Power
Along with the Hercules financing, Plug Power has converted the $25 million short term borrowing it concluded in the first quarter of 2016, to longer term project financing. Paul Middleton, Plug Power CFO said, “Completing these second quarter financing transactions are additional key steps in our long term capital strategy,” and added, “These measures and other near term initiatives will help drive continued growth in both sales and profitability.”
Plug Power will give further information and greater detail on its strategic borrowing plans and capital strategy at the upcoming second quarter conference call scheduled for early August. It is thought that they will announce that they plan to continue looking for long-term financing that can provide workable short-term conditions, that allow for greater flexibility.