VANCOUVER, British Columbia (Reuters) - Shares in Ballard Power Systems rose more than 7 percent on Tuesday morning after the fuel cell maker agreed to offload its stake in a fuel cell research group for about C$44.5 million.
Ballard said it had closed a deal with an unnamed financial institution to monetize its rights relating to its 19.9 percent stake in Automotive Fuel Cell Cooperation Corp (AFCC), a private company owned jointly by Daimler AG, Ford Motor Co and Ballard.
In terms of the deal, Ballard will receive gross proceeds of about C$44.5 million ($42 million), split between C$37 million today and a further contingent payment of C$7.5 million later.
"The cash proceeds from this transaction bolster Ballard's strong balance sheet and strengthen our positioning to execute our clean energy growth priorities," said Ballard Chief Executive John Sheridan.
Ballard expects to book a gain of C$34 million in its fourth quarter results because of the deal.
Shares of Vancouver-based Ballard rose as high as C$2.12 on the Toronto Stock Exchange on Tuesday, a gain of 15 Canadian cents or almost 8 percent.
Vancouver-headquartered AFCC was formed in 2007 around Ballard's former automotive fuel cell unit. After many years of research but no commercially viable product, Ballard sold the unit saying it would take too much money and time to develop an affordable propulsion system technology.
Daimler holds a 50.1 percent stake in AFCC and Ford 30 percent.
Ballard, which now makes fuel cells for forklifts and back-up power generation, said it will continue to supply technical services and fuel cell components and modules to AFCC.
(Reporting by Nicole Mordant; editing by Rob Wilson)