What is the main purpose of this transaction with SPDS?

The main purpose is to partner with SPDS, a subsidiary of Southern Power, to upgrade an existing Bloom Energy project in Delaware. SPDS will acquire a majority interest in DSGP, and the funds generated will enable the purchase of new Bloom Energy Servers for the project.

How does Bloom Energy benefit financially from this deal?

Bloom benefits by selling new Energy Servers to DSGP for the project upgrade and continuing to operate and maintain the project, which generates ongoing service revenue. The transaction also involves Bloom repurchasing existing servers and buying out another equity holder, restructuring the project ownership and financing.

What is Bloom Energy's role after the transaction closes?

Bloom Energy will continue as the operator of the project. This includes installing and commissioning new Energy Servers, and providing operations and maintenance services, along with warranties for the energy output.

What are the key financial commitments Bloom Energy has made?

Bloom Energy made a partial payment of approximately $72.3 million towards repurchasing existing Energy Servers from DSGP. Additionally, Bloom has agreed to purchase equity interests from Mehetia Inc. for $57.5 million, to be paid in installments, with the final payment due by March 31, 2020.

BE 8-K: Material Agreements

Summary

Bloom Energy Corporation (BE) announced a significant transaction on June 14, 2019, with SP Diamond State Class B Holdings, LLC (SPDS), a subsidiary of Southern Power Company. This deal involves SPDS acquiring a majority interest in Diamond State Generation Partners, LLC (DSGP), an affiliate of Bloom Energy. The primary purpose of this transaction is to fund the purchase of new Bloom Energy Servers for the upgrade of an existing project in Delaware. This strategic move positions Bloom Energy to benefit from the deployment of its core technology while leveraging a partnership for project financing and expansion. The transaction entails Bloom repurchasing existing Energy Servers from DSGP and subsequently selling new ones to DSGP as part of the upgrade. Bloom will continue to operate the project, ensuring ongoing revenue streams. The financial aspects include Bloom's partial payment of approximately $72.3 million for repurchasing existing servers and a commitment to purchase equity interests from Mehetia Inc. for $57.5 million. This series of agreements highlights Bloom Energy's strategy to facilitate project development through partnerships and to secure capital for its technology deployment.

Key Highlights

1Bloom Energy entered into a material definitive agreement with SP Diamond State Class B Holdings, LLC (SPDS), a Southern Power Company subsidiary.
2SPDS will acquire a majority interest in Diamond State Generation Partners, LLC (DSGP), an affiliate of Bloom.
3The transaction will fund the purchase of Bloom Energy Servers for an upgrade of an existing project in Delaware.
4Bloom will repurchase existing Energy Servers from DSGP and then sell new Energy Servers to DSGP for the project upgrade.
5Bloom made a partial payment of approximately $72.3 million for the repurchase of existing Energy Servers.
6Bloom will purchase equity interests in the project from Mehetia Inc. for $57.5 million, with final payment by March 31, 2020.
7Bloom Energy will continue to operate and maintain the project, securing ongoing service revenue.

Bloom Energy Corp 8-K Report, Material Agreement (Jun 20, 2019)

Summary

Key Highlights

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