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Technology Stocks : Ballard Power -world leader zero-emission PEM fuel cells -- Ignore unavailable to you. Want to Upgrade?

To: Hawkeye who wrote (1399)	12/15/1997 12:06:00 PM
From: HarveyO	Respond to of 5827

BALLARD, FORD, DAIMLER-BENZ TO JOIN FORCES TO DEVELOP FUEL CELL TECHNOLOGY FOR FUTURE VEHICLES IN OVER C$600 MILLION TRANSACTION JOINT NEWS RELEASE STUTTGART, Germany, Dec. 15 /CNW/ - A significant global Alliance to develop fuel cell technology was announced today among three leaders in the field - Ballard Power Systems Inc., Daimler-Benz AG and Ford Motor Company. The three companies signed a detailed memorandum of understanding today in Stuttgart, with the expectation that final agreement will be reached within a few months. The transaction is subject to applicable regulatory and stock exchange approvals. The agreement would ally two of the world's foremost companies in automotive technology with the fuel cell industry's leading developer and manufacturer, in order to accelerate the development of fuel-cell power components for cars and trucks. ''Ford sees this partnership as a natural complement of the talent, skills and technology among the three companies,'' said Ford Chairman Alex Trotman. ''We have been working on the technology to support fuel cell vehicles for many years and view fuel cells as one of the most important technologies for the early 21st century. With our collaborative efforts, we think we can accelerate the commercial viability and implementation of fuel cell vehicles.'' Jurgen E. Schrempp, Chief Executive Officer of Daimler-Benz, expressly welcomed the new alliance and stated, ''This cooperation is impressive evidence of the fact that the fuel cell represents a serious and promising alternative to the conventional combustion engine.'' ''Ford joining Ballard and Daimler-Benz to bring the next generation of clean, efficient, propulsion systems for vehicles to the world's automobile industry is yet another historic event for Ballard. Ford adds significant market and technical strength to the Alliance which is dedicated to bringing fuel cell powered vehicles to the world market'', said Firoz Rasul, President and Chief Executive Officer. ''Through Ballard's relationship with Ford and Daimler-Benz, we have the strength, resources and commitment to bring Ballard Fuel Cells to volume commercial production.'' Ballard Power Systems is the world leader in the development of proton exchange membrane fuel cells. Daimler-Benz has unique expertise in research into alternative drive systems and automotive fuels. Ford is highly regarded for its advanced electric vehicle powertrain technology. Fuel cells, which generate electricity from hydrogen and oxygen from air to power vehicles, have the potential to provide the size, range, roominess and speed of conventional cars and trucks while emitting little more than water vapor into the atmosphere. The Alliance aims to have fuel cell powertrains available to support commercialization of fuel cell vehicles by 2004. Ballard will be responsible for fuel cells, with Daimler-Benz and Ford holding 20% and 15% of Ballard Power Systems Inc., respectively. Daimler-Benz will be the majority owner of DBB Fuel Cell Engines GmbH, responsible for fuel cell systems, with Ballard and Ford holding about 26% and 23% respectively. Ford will be the majority owner of a new company responsible for electric drivetrain systems, with Ballard and Daimler-Benz owning 19% each. Ford will invest C$296 million of cash in Ballard Power Systems to acquire 3,662,500 shares in Ballard at a price of C$80.80 based upon the 20 trading day weighted average price calculated as of Friday, December 12, 1998. Ford will also acquire from Daimler-Benz 393,750 common shares of Ballard so that after the transactions Ford will own 15.1% and Daimler-Benz will own 20.0% of Ballard. Ford will also invest C$100 million of cash in DBB Fuel Cell Engines and acquire an additional C$16.5 million interest in DBB from Daimler-Benz so that after the transactions Ford will own 23.3%, Ballard will own 26.6% and Daimler-Benz will own 50.1% of DBB Fuel Cell Engines. In addition, a new entity (ECo) will be formed to further develop and commercialize electric drive trains for electric vehicles. Ford will invest C$202 million of cash, technology and other assets, and Ballard will invest C$48 million of cash, in ECo and Daimler-Benz will acquire C$48 million in ECo shares from Ford such that Ballard and Daimler-Benz will each own 19.2% and Ford will own 61.6% of ECo. Background Technical Information: Ballard Fuel Cells are clean and efficient electrochemical devices which convert a fuel into usable electricity, directly without combustion. Surrounding the fuel cell is a system which consists of a fuel processor, air supply, and control subsystems. An electric drive system consists of a traction inverter, electric motor, and transaxle which converts electricity generated from a fuel cell system or stored in batteries to tractive power for car, truck, bus or other vehicle. Fuel cell applications include small, portable emergency electricity-generating power plants, distributed power plants up to one megawatt in size, engines to power cars, buses, trucks, rail vehicles, ships, satellites and space stations. The major advantage of this technology is that it offers low - or even zero - emission levels with a high degree of efficiency. A fuel cell takes hydrogen fuel, which can be obtained from natural gas or methanol, and oxygen from the air and electrochemically combines them to produce electricity and heat with pure water as the only by-product. The various types of fuel cells are identified by the different electrolytes used. A Ballard Fuel Cell uses a Proton Exchange Membrane (PEM). A PEM fuel cell consists of two electrodes, the anode and the cathode, separated by a polymer electrolyte. Each of the electrodes is coated on one side with a platinum catalyst. Hydrogen fuel dissociates into free electrons and protons (positive hydrogen ions) in the presence of the platinum catalyst at the anode. The free electrons are conducted in the form of usable electric current through the external circuit. The protons migrate through the membrane electrolyte to the cathode. At the cathode, oxygen from the air, electrons from the external circuit and protons combine to form pure water and heat, to obtain the desired amount of electrical-power-generated individual fuel cells in a stack. Increasing the number of cells in a stack increases the voltage, while increasing the surface area of the cells increases the current. Proton exchange membrane fuel cells are suited for mobile applications -- cars or buses -- because of their operating temperatures of between 20 and 100 degrees Celsius and their high power density. They can be operated with hydrogen derived from fuels such as methanol or natural gas and with oxygen derived from normal air. PEM fuel cells have been demonstrated in transportation, stationary and portable power applications. Ford Motor Company is the world's largest producer of trucks and the second largest producer of cars and trucks combined. Ford sells more than 70 different types of vehicles worldwide, marketed under the Ford, Lincoln, Mercury, Jaguar, and Aston Martin Brands. Revenues in 1996 were US$147 billion. In 1996, more than 370,000 people were employed by Ford worldwide. Daimler-Benz is the world's most comprehensive provider of technologically advanced transportation products, traffic systems and services and has 290,000 employees and revenues of approximately US$60 billion. Daimler-Benz is focused on the development and manufacture of Mercedes-Benz cars and commercial vehicles, Freightliner trucks, rail systems, diesel engines and microelectronics. Ballard Power Systems is the world leader in the development of proton exchange membrane fuel cells. At the heart of its products is the Ballard Fuel Cell, a proprietary zero-emission engine that converts methanol, natural gas, gasoline or hydrogen fuel into electricity without combustion. Ballard Fuel Cells are currently being used by leading international companies to develop zero-emission vehicles and clean stationary electric power generators. Ballard's Common shares are listed on The Toronto Stock Exchange under the trading symbol ''BLD'' and on the Nasdaq National Market System under the symbol ''BLDPF''. -0- 12/15/97 For further information: Investor information: Paul Lancaster, Ballard Power Systems Inc., Burnaby, BC, Canada, Tel: (604) 454-0900, Fax: (604) 412-4700; Media information: Debby Roman, Ballard Power Systems Inc., Tel: (604) 412-4740, Fax: (604) 412-3131, debrom@ballard.com; Wolfgang Scheunemann, Daimler-Benz AG, Stuttgart, Germany, Tel: (011) 49 711 17 93307, Fax: (011) 49 711 17 94365, 100106.5586@compuserve.com; Ian Slater, Ford Motor Company, Dearborn, MI, USA, Tel: (313) 322-9600, Fax: (313) 845-0570

To: Hawkeye who wrote (1399)	12/15/1997 12:06:00 PM
From: Jim (Hijacked)	Read Replies (1) \| Respond to of 5827

This baby hit 70 this morning. How high can Ballard go? Anyone for 100 next year? Or even this year? Or is this a classic setup for the small investors. anyone has any analysis? Thanks, Jimbo.

To: Hawkeye who wrote (1399)	12/15/1997 4:21:00 PM
From: Jan Johnstone	Read Replies (2) \| Respond to of 5827

Happy Days seem to be here again !! Everything sounds good, but the volume and number of odd lots is reason for concern. Too many 30,50 share trades, and not enough 3000, 5000 share trades. This thing will really move if the funds finally jump on board. The fact that they haven't seems strange. Heck, even Bre-X had major funds investing in it. Jan

To: Hawkeye who wrote (1399)	12/16/1997 12:05:00 PM
From: Sid Turtlman	Respond to of 5827

Hawkeye: I appreciate your invitation to give a negative spin to yesterday's Ford announcement, although rather than call it a negative spin, I would rather use the term "healthy skepticism". <G> My take is that this deal shows that DB is starting to grasp the immensity of the task ahead, and has upped its estimate on how much may have to be spent to commercialize a fuel cell car. Why else would it bring in another partner now? Why not just sell engines to Ford in 2004? You can make more money that way, than bringing them in as partners seven years before the cars will be produced. In terms of spin, I would award the Nobel Prize in that to the management of Ballard. Look at how the story has changed in the last year: 1. Until mid April, fuel cell cars were going to be a multi-billion dollar market that Ballard was going to have all to itself. Nowhere in any of the literature did Ballard indicate that the company could never get there on its own. 2. Starting in April, cars were going to be a multi-billion dollar market that Ballard would now split with DB. If anybody else wanted to adopt the technology, they would be customers. They would buy the engines from the joint venture, of which Ballard only has 1/3, or buy the fuel cells from Ballard and make their own engines. 3. Now, cars blah blah blah and, isn't this exciting, we have another partner. Ballard's share of the engine company is now down to 26.6%. Not only that, but the end customers' dollars now have to be dished out to a third entity, the electric drivetrain company, of which Ballard will own 19.2% Are there more partners to come, further reducing Ballard's piece of the potential action? Soon it will be like "Old Man and the Sea"; the fish will be mostly a skeleton when finally rowed into the harbor. Bringing in the extra partners has certainly increased the probability that a fuel cell car may some day be introduced (a probability that the Ballard cult always thinks is 100%; I say less). But it has also added shares outstanding, with the total (including the warrants that were exercised) going from 16.8 million before DB, to 23.2 million with DB but before Ford, to 29.9 million after the Ford deal goes through. All this serves to increase Ballard's market cap. Using US dollars, before the DB deal Ballard had a market cap of $400 million or so, a lot of money, but offering the possibility of huge upside. As of the last Friday, Ballard had a market cap of $1.4 billion, would keep profits from making the fuel cells and one third of the profits from the engine company. At today's prices, assuming that the Ford deal goes through as promised, Ballard's market cap goes over $2 billion, and the company gets to keep an even smaller percentage of whatever profits may someday exist. I am not arguing that Ballard should have gone it alone. It obviously would never have had the resources to do so. Now, it appears, estimated costs have risen so much that even the deep pockets of DB are not deep enough. All this dilution reduces the EPS potential. It also increases the risk. If there is any delay, cost overruns, or a partner gets unhappy for whatever reason and pulls out, the stock has just that much more room to fall and still be overpriced. On the positive side, having 19.2% of the new electric drivetrain company will be a plus if, as seems quite possible, the success of gas/electric hybrids cause DB and Ford to pull the plug on fuel cell work in a few years. The electric drive trains could be useful in hybrids, so its piece of this Ford subsidiary might keep Ballard stock from falling all the way to zero.