8-KMaterial AgreementsExhibits & Filings

Bloom Energy Corp 8-K Report, Material Agreement (Dec 22, 2023)

Filed December 22, 2023For Securities:BE

Summary

Bloom Energy Corporation (BE) announced a significant amendment to its Preferred Distributor Agreement (PDA) with SK ecoplant Co., Ltd., extending the partnership for the South Korean market through December 31, 2027. This Second Amendment to the Amended and Restated Preferred Distributor Agreement (the "Agreement") not only solidifies the relationship but also enhances it by increasing SK ecoplant's purchase commitments for Bloom Energy Servers. Key to this amendment is a new minimum purchase commitment of 250 megawatts (MW) and a revised total purchase commitment of 500 MW for the period of January 1, 2024, to December 31, 2027. The change from a "take or pay" to a minimum volume purchase commitment for 2024 offers greater clarity and predictability in future revenue streams from this crucial international partnership. Investors should note that failure to meet these commitments could result in damages equivalent to lost profit for Bloom Energy, highlighting the importance of this agreement for both parties.

Key Highlights

  • 1Extension of the Preferred Distributor Agreement with SK ecoplant through December 31, 2027.
  • 2Increased purchase commitments from SK ecoplant for Bloom Energy Servers in the South Korean market.
  • 3Introduction of a new minimum purchase commitment of 250 megawatts (MW).
  • 4Total purchase commitment under the agreement revised to 500 MW for the period January 1, 2024, to December 31, 2027.
  • 5Modification of the 2024 commitment from 'take or pay' to a minimum volume purchase commitment, providing clearer revenue visibility.
  • 6Failure to meet purchase commitments by SK ecoplant could result in damages for Bloom Energy equivalent to lost profit.

Frequently Asked Questions

The filing announces a material definitive agreement, specifically the Second Amendment to the Amended and Restated Preferred Distributor Agreement between Bloom Energy Corporation and SK ecoplant Co., Ltd. This amendment extends their distribution partnership in South Korea and increases SK ecoplant's purchase commitments.

The agreement extends the term to December 31, 2027, and establishes a total purchase commitment of 500 MW for Bloom Energy Servers from January 1, 2024, to December 31, 2027. It also introduces a new minimum purchase commitment of 250 MW and revises the 2024 commitment to a minimum volume purchase instead of a 'take or pay' structure.

Shifting the 2024 commitment to a minimum volume purchase provides Bloom Energy with a clearer and more predictable revenue target from SK ecoplant, reducing the risk associated with the previous 'take or pay' structure, which could have led to immediate payment obligations even if volumes were not met.

If SK ecoplant fails to meet either the quarterly purchase commitments or the overall 500 MW total commitment, it would constitute an event of default. In such a scenario, Bloom Energy would be entitled to receive damages equivalent to its lost profit.