Plug Power Rallies As New Financing, Cost Cuts Boost Confidence In Turnaround Plan
Plug Power Inc (NASDAQ:PLUG) announced Monday it has signed a deal for a secured debt facility and has achieved key operational and financial milestones that support its path toward profitability and long-term growth. The stock price gained after the update.
Plug has inked a deal for a secured debt facility with Yorkville Advisors that will allow the issuance of up to $525 million of secured debentures.
Also Read: Plug Power Stock Sinks 40% In April Amid Financial Struggles Despite Hydrogen Plant Launch
The facility includes an initial $210 million tranche, which will be fully funded at the initial closing, as well as additional tranches of up to $315 million. The initial tranche will likely close by May 2, 2025.
With the net proceeds from the initial tranche, Plug intends to use approximately $82.5 million to retire the majority of its existing convertible debenture principal outstanding with Yorkville.
Plug will report its first-quarter 2025 results in early May. Plug expects to report revenue of approximately $130 million to $134 million for the first quarter of 2025, compared to the analyst consensus of $131.61 million. Plug expects second-quarter revenue of $140 million to $180 million, versus the analyst consensus of $160.20 million.
Plug expects first-quarter net cash usage of approximately $142 million compared to $268 million a year ago. The company ended March 31, 2025, with approximately $296 million in unrestricted cash.
Plug completed construction of its new 15 TPD hydrogen production plant in St. Gabriel, Louisiana. Operated through the Hidrogenii joint venture with Olin Corporation, this facility strengthens Plug’s vertically integrated hydrogen network and will serve anchor customers, including Amazon.Com Inc (NASDAQ:AMZN) and Walmart Inc (NYSE:WMT).
Plug has taken decisive actions to reduce its operational cost base, implementing changes in the first quarter that will likely drive over $200 million in incremental annualized run-rate savings. These cost-cutting measures, which have been largely completed, include organizational realignment and a company-wide focus on manufacturing and supply chain efficiency. The full impact of these cost savings will begin to be reflected in the coming quarters.
Plug Power stock has plunged over 65% year-to-date after analysts cut their price targets for the stock, as it failed to meet its quarterly revenue and EPS consensus.
Price Action: PLUG stock is up 12.0% at $0.9056 premarket at last check Monday.
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