RE: Very large transaction2 Oct 2025 12:01
SNewby
Bosch was one of Ceres' early partners in SOFC development and deployment, mostly in standalone power generation units. This goes back some time, as they bought their first tranche of CWR shares in September 2018. That shareholding was significantly increased in 2020 and again in 2021 to 33.8 million shares, costing Bosch £135 million.
So far so good.
Bosch Weichi and Ceres planned a tripartite joint venture to build a major plant in China, but that deal collapsed for reasons that were never disclosed. That collapse was a major trigger for Ceres' share price decline, partly because of the scale and because our then two biggest (only) partners appeared to have a 'problem' with Ceres.
In the last 2-3 years, Bosch seems not to have done very much. Lots of development work and employing 200 people. However, they did not build a full-scale manufacturing plant. Contrast that with more recent partners, e.g Doosan, Delta, etc, who are building very quickly after signing agreements with Ceres.
In February this year, Bosch announced they were cancelling their agreement with Ceres and intended to sell their shares in a managed process, i.e not just dump them in the open market. A logical decision, as they would have crashed the price and lost even more money.
The existence, and associated uncertainty, of this large block of 'for sale' shares has been hanging over the Ceres price since then. The first stage of relief was when M&G bought 6.4 million shares at 94p. That was important because it put a floor under the price, which had been as low as 50p.
Yesterday's transactions remove the overhang completely, and that is good.
The somewhat muted response this morning is because we do not yet know who the buyers are (there were two transactions, so two buyers?). When we know who they are, that removes the final uncertainties. There are two major possibilities. Institutional buyers like M&G, or a trade sale to one or more of our existing partners.
Personally, I think the second is better as it is a strong statement of confidence in Ceres technology, and Partner's long-term intent and purpose in SOFC/SOEC products and markets.
Bosch made a strategic error in investing in and licensing Ceres technology. That has been a very expensive mistake for them. The Ceres licence costs, ongoing engineering support since 2018. creating a business employing 200 people for say 5 years and then closing it down (not cheap to do in Germany). Their loss on the shares alone is £89.4 million, probably paid Cerses £40-50 million plus, plus, plus. This mistake has left them with little change out of £250m.
So we all live and we all learn a bit.
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