FuelCell Energy (FCEL) Stock Pops On Restructuring Update!

FuelCell Energy FCEL Stock News

FuelCell Energy Inc (NASDAQ: FCEL) is having yet another strong start to the trading session this morning. While yesterday’s gains were largely driven by adoption within the fuel cell/hydrogen power industry, today’s gains are more company specific.

In a recent SEC filing, FCEL made multiple announcements. These included management updates, funds raised and debt paid. Here’s what’s going on:

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FCEL Pops On Several Updates

In a recent SEC filing, FuelCell provided multiple updates. The first of these updates was that Jason B. Few, current President and CEO, has been appointed as the Chief Commercial Officer for the company.

As a result of the appointment, Mr. Few will assume the role held by Jennifer D. Arasimowicz, following her term that ended on September 12, 2019.

Mr. Few knows the company well, serving as a director since 2018. He was appointed as President and CEO of FCEL as of August 26, 2019 and has made several important moves so far.

Prior to his work with FCEL, Mr. Few served as President of Sustayn Analytics, Founder and Senior Managing Partner of BJF Partners, and more. In fact, he brings more than 30 years of experience increasing value for global Fortune 500 and privately-held companies to the table.

In the filing, FuelCell also announced that it has appointed Jennifer D. Arasimowics as its Chief Administrative Officer. Ms. Arasimowics will also continue to serve as the company’s General Counsel, Corporate Secretary, and Executive Vice President.

In other news, the company also announced that between September 10, 2019 and September 12, 2019, it sold a total of 34.4 million shares at an average price of $0.42 per share in a previously announced ATM transaction.

The transaction led to gross proceeds of about $14.6 million before deducting expenses and commissions. The company then paid $400,000 in commissions, resulting in net proceeds of about $14.2 million.

In the filing, FCEL said that net proceeds of the sale have been settled and funds have been recieved. Importantly $2.1 million of these funds will be used to pay outstanding balances with Hercules Capital. This will bring the balance under the facility down to about $3.6 million. The company said that it plans to use an additional $2.2 million of the net proceeds to further pay down this facility, bringing the balance to about $1.4 million.

Finally, FuelCell Energy said that as a result of paying the credit facility to below $5 million before the deadline, it has been automatically extended through October 22, 2019 or the occurance of any event of default under the Tenth Amendment of the credit facility agreement.

With Hercules extending the facility, the move also leads to the extension of one of the deadlines under its first amendment to its construction loan agreement with Fifth Third Bank. As a result of this extension, the company now has until October 21 to deliver a binding loan agreement for permanent financing from another lender and one or more binding letters of intent from tax equity investors in the amount of at least $18 million.

Why Investors Are Excited

Ultimately, investors are excited for multiple very good reasons here. First and foremost, the company has been working to clean up its management team, and seems to be doing just that.

This management team is also making big moves when it comes to resturcturing the financial stability of the company. As the restructuring continues, the company is building a strong financial foundation from which to grow.

Importantly, the extensions provided by Hercules and Fifth Third Bank give the company the time it needs to continue with positive momentum in the restructuring efforts without having to worry about additional costs from these lenders. All in all, this news is overwhelmingly positive for FCEL

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