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(Alliance News) - Ceres Power Holdings PLC shares were up by a quarter on Wednesday after it announced plans to add Robert Bosch GmbH as a third partner in its collaboration with Weichai Power Co Ltd to enter the Chinese market.
The Horsham, England-based fuel cell and electrochemical technology has signed non-binding head of terms for a three-way collaboration with Wechai and Bosch to capitalise on "substantial" market opportunities for fuel cell technologies in China.
The addition of Bosch will "significantly strengthen" the partnership, increasing the scope to include stationary power applications.
Shares in Ceres were up 24% to 642.92 pence each in London on Wednesday around midday.
Two separate joint ventures are intended to be formed in Shandong Province, China.
A three-way system JV, with Wechai as majority shareholder, will develop and manufacture solid oxide fuel cell systems. Bosch and Ceres will license their intellectual property relating to SOFC systems to the JV for mobile and stationary applications, and share royalties from its sales. Ceres will hold a stake no larger than 10%, with an estimated investment of around GBP20 million over time.
A second JV, with Bosch as majority shareholder, will supply fuel cell stacks to the other JV, and potentially third parties. Ceres will not be a shareholder, but will receive royalties from sales, as it will provide SOFC technology via an extension of Bosch's Chinese manufacturing license.
Ceres expects license fees of GBP30 million from the JVs in the next three years, which was in line with the amounts expected from its previous arrangement with Wechai, which was formalised back in December of 2018.
Chief Executive Officer Phil Caldwell said: "This exciting collaboration represents an important step in Ceres' ambitions for the Chinese market and a critical part of delivering global manufacturing capacity for our technology.
"We have every confidence in our partnership with Weichai and with the addition of Bosch's expertise in industrialisation and manufacturing have the potential to establish one of the strongest partnerships in the fuel cell industry."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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