Quantum Fuel Systems Technologies Worldwide Inc. has agreed to sell two Canadian wind farms and related assets for more than $3.5 million to two separate unnamed buyers.
The sale has been expected for months as the Lake Forest-based company has sought to refocus on its core business of producing natural-gas fuel tanks. The shift was announced last year and followed a loss of $24.2 million through the first nine months of 2012.
It appears Quantum will take a loss on the sale of the wind farms, which were part of its renewable energy portfolio. It acquired the land as part its buy of Toronto-based Schneider Power for $20 million in 2010. Schneider remains a subsidiary of Quantum.
“Maximize Value”
“We have determined that we can maximize value by selling off individual project assets and are confident that we will be able to monetize these assets, generate meaningful cash proceeds and reduce the amount of debt on our balance sheet over the next six months,” Chief Executive Brian Olson said.
The transactions are expected to close by late April.
Quantum is set to receive about half of the payments of the deals at closing, with the remaining amount contingent upon developing the assets into commercial operations.
The buyer of the Providence Bay wind farm will assume about $1.2 million in debt, while the buyer of the Trout Creek development will assume more than $200,000 in obligations.
The Trout Creek buy also includes a stipulation to purchase the remaining 25.1% ownership stake for about $1.1 million when the development is completed and operable, according to Quantum.
• Headquarters: Lake Forest
• Business: Manufacturer of natural-gas tanks
• Founded: 2000
• Ticker symbol: QTWW (Nasdaq)
• 2012 revenue: $11.9 million (through first nine months)
• Recent earnings: ($9.4 million)
• Market value: About $30.1 million
• Notable: Canadian subsidiary sells wind farms, shopping others
Offers, Letters
Quantum last week also announced that it received offers and letters of interest for a 10 megawatt operational wind farm in Ontario, a 50 megawatt development project in the Dominican Republic, and 1 megawatt development in the Bahamas.
One megawatt can power about 1,000 homes.
Quantum also owns a 25% stake in Germany-based Asola Solarpower GmbH and has invested nearly $9 million in the company, according to regulatory filings.
Asola makes solar panels and solar roofs, including the ones on the Fisker Karma.
Asola continues to see operating losses and revenue declines amid competition from manufacturers in China, Quantum disclosed in earnings reports.
Fisker
Quantum shares were down 10% at the close of trading on March 13 to a market value of about $29.6 million. Shares sank in the wake of Fisker Automotive Inc. founder Henrik Fisker’s resignation earlier that day.
Quantum supplies the Anaheim-based hybrid luxury automaker with components and drive systems on its flagship Karma sedan, but it has seen contract orders dwindle the last six months amid financial and operational troubles.
Fisker Automotive has been linked to China-based automakers Dongfeng Motor Corp. and Volvo owner Geely Holding Group as potential suitors to buy the cash-strapped company (see related story, HERE >>).
