AFC Energy, a leading provider of hydrogen power generation technologies, announced the signing of its Joint Venture Agreement with Speedy Hire Plc, for the formation of a dedicated hydrogen powered generator plant hire business, Speedy Hydrogen Solutions Ltd (“SHS”).
Highlights
· SHS incorporated as a 50:50 Joint Venture to provide exclusive access to AFC Energy’s H-Power Generators across the UK and Irish markets.
· First year H-Power Generator sales to SHS of up to £4.7m.
· Exclusivity subject to SHS satisfying annual growth in minimum order quantity over first three years.
· H-Power Generator sales to be phased into SHS over the first contract year.
· AFC Energy to procure and sell hydrogen fuel, technical and operational support to SHS.
· Speedy to provide marketing, accounting and logistical support to SHS’s operations.
· Strong customer interest with growing pipeline.
Background
Speedy Hire is the UK and Ireland’s leading provider of tools, specialist equipment and services and is seeing strong demand from its customers for sustainable portable power solutions. This demand is driven by tendering requirements and emission regulations with UK projects such as HS2 targeting the removal of diesel generators from all sites by 2029.
Order
Under the SMA, SHS commits to an initial order from AFC Energy, for delivery throughout the first six months of 2024, of generators at a committed value of £2m with the intention to increase orders up to c.£4.7m across the first full contract year (commencing 1 Nov. 2023). The delivery profile of generators above the committed value is subject to performance and market uptake consistent with the business plan.
A minimum order quantity is provided for under the Supply and Maintenance Agreement between AFC Energy and SHS, which increases annually, in order for SHS to maintain exclusivity in the UK and Ireland. The minimum order quantity is phased over three years, with potential for further growth to meet customer demand at the time.
Joint Venture Funding
To fund the first contract year’s orders, an initial total equity injection into SHS (as a subscription for shares) of £1.25m (£0.625m each) shall be made upon formation of SHS. This injection shall be funded out of each company’s respective cash reserves which, in the case of AFC Energy, stood at c.£27m at 31 October 2023.
Dan Evans, Chief Executive at Speedy Hire, said:
” Our JV with AFC Energy further strengthens our market leadership in combining product innovation and sustainability solutions that are increasingly critical and in demand from our customers. We continue to make progress in the delivery of our ambitious plan to be a net zero business by 2040 and, together with other recently announced developments like the acquisition of Green Power Hire, provide strong and unique evidence of our Velocity strategy in action.”
Adam Bond, Chief Executive at AFC Energy, said:
“We are pleased to announce this exciting collaboration with the UK’s leading sustainable plant hire business, Speedy Hire. We have every confidence that SHS will support the UK and Irish construction sector’s transition away from diesel towards its ambitious decarbonisation targets, representing a game changer in the way sustainable off-grid power is delivered to industry. With strong interest already evidenced from contractors and at industry events, we expect this venture to now raise the bar in the delivery of sustainable off-grid power.”
Press release https://is.gd/VkeJjn
