Ballard Power to acquire stake in Adani Power

Canada's Ballard Power Systems, the world leader in clean energy hydrogen fuel cell products is planning to acquire a 10 per cent stake in Adani Power, part of the $5 billion diversified Adani Enterprises Group, in a deal valued at around $500 million (Rs2,250 crore), The Times of India (TOI) today reported, citing an industry source.

Adanis, who hold 73.5 per cent of the company, have raised funds by pledging over 53 per cent of the promoter shares in the firm, which is valued at Rs9,213 crore, said the paper.

Ballard Power designs, develops, and manufactures zero emission proton-exchange-membrane fuel cells. The British Columbia, Canada-based company has made a bus that uses only hydrogen fuel cells, which combine hydrogen and oxygen to produce electricity and water.

Since pollution is produced by this process, the water is good enough to drink, according to the company's website.

Ballard Power has strategic partnerships with Dantherm Power, which develops clean energy backup power through its hydrogen fuel cell technology; and Automotive Fuel Cell Cooperation Corp that develops fuel cell products for the automotive fuel cell market.

It has sold more than 120-megawatts (120 MW) of its fuel cell stacks, modules & systems to customers in a various countries on five continents. Its customers include Toyota, Wind Mobile, Hutchison Telecom, FirstEnergy Corp, WalMart, BMW, Coca-Cola, FedEx among others.

Interestingly, this Toronto-listed innovative company has never reported an annual net profit since Geoffrey Ballard and Firoz Rasul founded the company in 1987, and has since made a little below a billion dollars in losses over that period.

This has raised a question mark on how the Canadian company would be able to rake up $500 million to invest in Adani Power.

Despite an increase in revenues from $46.7 million in 2009 to $65 million last year, Ballard Power has seen its bottom line shrink from a loss of $3.3 million to an even larger loss of $34.9 million in the same corresponding years.

Ahmedabad-based Adani Power, the largest private sector thermal power producer in India with plans to implement projects worth about Rs16,000 crore in Gujarat and Tiroda in Maharashtra in the current financial year, to take its generation capacity to 6,000 MW by 2011-12.

The company is implementing 16,500 MW of thermal power projects at six locations - Mundra (4,620 MW), Bhadreshwar (3,300 MW) and Dahej (2,640 MW) in Gujarat; Tiroda (3,300 MW) in Maharashtra; Kawai (1,320 MW) in Rajasthan; and Chhindwara (1,320 MW) in Madhya Pradesh.

It is in the process of setting up a 4,620 MW coal-based plant at Mundra comprising five supercritical units of 660 MW each and four units of 330 MW each.

The Adani Group is one of the fastest growing business houses in the country having diverse interests such as global trading, development and operation of ports, IDC terminal, establishment of SEZ, oil refining, logistics, gas distribution, power generation, power transmission and power trading etc.

Source: domain-b.com