What is the primary purpose of the new agreements with SK ecoplant?

The primary purpose is to secure significant funding for Bloom Energy through a secondary investment of approximately $311 million in preferred stock and a related loan facility of up to $310.96 million from SK ecoplant. These funds are intended for working capital and general corporate purposes.

What are the key features of the Series B Redeemable Convertible Preferred Stock (RCPS)?

The RCPS are non-voting, non-dividend bearing, and have liquidation preferences over common stock. They are redeemable at the option of the holder and will automatically convert into Class A Common Stock six months after the closing of the secondary investment, with an option for earlier conversion.

What is the purpose and structure of the Shareholder's Loan Agreement?

The Shareholder's Loan Agreement provides Bloom Energy with a potential source of liquidity up to $310.96 million. The loan has a five-year maturity and a 4.6% interest rate. Bloom Energy can draw upon this loan if SK ecoplant or its affiliate indicates an intention to hold fewer shares than specified under certain conditions, acting as a financial backstop.

How does this transaction impact Bloom Energy's existing capital structure and potential future dilution?

The issuance of preferred stock introduces a new class of security with liquidation preferences. While the RCPS are convertible into common stock, the automatic conversion after six months (or earlier at SK ecoplant's option) suggests a plan for eventual equity conversion, which could lead to dilution for existing common stockholders at that time. The specific conversion price and terms will be detailed in the Certificate of Designation.

BE 8-K: Material Agreements, Securities & Listing & More

Summary

Bloom Energy Corporation (BE) has entered into amendments to its existing agreements with SK ecoplant Co., Ltd., detailing a significant secondary investment and a related loan facility. SK ecoplant will purchase approximately $311 million of Series B redeemable convertible preferred stock (RCPS) at $23.05 per share. This preferred stock will be issued to Econovation, LLC, an affiliate of SK ecoplant, and carries liquidation preferences over common stock. The RCPS are non-voting, do not accrue dividends, and will automatically convert to Class A Common Stock six months after closing, with the option for earlier conversion. In conjunction with this investment, Bloom Energy has secured a shareholder's loan agreement with SK ecoplant for up to $310.96 million, with a five-year maturity and a 4.6% interest rate. This loan can be drawn down if SK ecoplant or its affiliate intends to hold fewer shares than specified, providing a potential liquidity backstop for Bloom Energy. The company intends to use the loan proceeds for working capital and general corporate purposes.

Key Highlights

1SK ecoplant to invest approximately $311 million in Bloom Energy through the purchase of Series B redeemable convertible preferred stock (RCPS) at $23.05 per share.
2RCPS will be issued to Econovation, LLC, an affiliate of SK ecoplant, and are non-voting and non-dividend bearing.
3RCPS are redeemable at the option of the holder and carry liquidation preferences over common stock.
4Automatic conversion of RCPS to Class A Common Stock is scheduled for six months after closing, with an option for earlier conversion.
5Bloom Energy secures a shareholder's loan agreement with SK ecoplant for up to $310.96 million, with a 4.6% interest rate and a five-year maturity.
6Loan proceeds are intended for working capital and general corporate purposes.
7The transactions are structured as unregistered sales of equity securities, relying on Section 4(a)(2) of the Securities Act of 1933.

Bloom Energy Corp 8-K Report, Material Agreement (Mar 23, 2023)

Summary

Key Highlights

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