FuelCell Energy Inc (NASDAQ: FCEL) is having yet another incredibly strong day in the market today. In fact, the market just opened minutes ago and the stock is already up more than 15%. While the company didn’t issue any news today, the gains are coming for very good reason. Here’s what’s going on:
FCEL Restructuring Went Over Smoothly
FuelCell Energy hasn’t had the best of times as of late. Don’t believe me? Just take a look at the stock chart in the year to date frame. What you’ll see is a stock that has given up the vast majority of its value.
The declines came for good reason. The company’s financial position was painful, leaving the company strapped to the point that it could not efficiently complete, or even begin much of the work that’s building up in its downline.
Nonetheless, FCEL recently announced that its efforts to restructure the company have been fruitful. From a financial standpoint, the company entered into a new 8-year $200 million strategic corporate loan facility with Orion Energy Partners.
This gives the company the funding it needs in order to start chipping away at its $2 billion project backlog. The first draw of $80 million has already been received by the company. The other $120 million being made available here will come over the next 18 months.
On top of the financial restructuring, FCEL announced an expanded, two-year joint-development agreement with ExxonMobil. The agreement surrounds the enhancement of carbon capture technology and is valued at up to $60 million.
In a statement, Jason Few, President and CEO at FCEL, had the following to offer:
The last several months have been a defining time for FuelCell. While challenging, our organization pulled together and executed the restructuring phase of our strategy that will set us up to execute the next leg of our transformation. With the commitment and strategic investments from Orion Capital Partners and ExxonMobil, FuelCell’s opportunity is to accelerate our momentum now and build on our 50 year history leading the advancement of fuel cell technology.
While we still have work to do, I’m proud of the collective efforts of all FuelCell Energy team members. They never lost sight of the needs of our global client base and partners during this time. We have laid the foundation for profitable growth and are now on a path to restore this great Company to a position of industry leadership across all metrics. Our leadership team looks forward to unveiling our go-forward strategy in early 2020.
Why This Is Such A Big Deal
Ultimately, this is exactly what investors have been waiting for. First and foremost, as mentioned above, the financial position at FuelCell Energy hasn’t been great. However, with the newly-announced $200 million credit facility, the company has plenty of cash runway to make it through several catalysts ahead.
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