Plug Power shares are deep in sustainability doubts

Nov 10 (Reuters) – Plug Power (PLUG.O) shares fell nearly 30% in pre-market trading on Friday after the hydrogen fuel cell maker raised doubts about business continuity.

The North American liquid hydrogen market has been severely constrained by recurring force majeure events, resulting in volume constraints, delaying PLUG deployments and service margin improvements, the company said on Thursday.

Plug is facing liquidity issues and has lost more than half of its market value since the beginning of the year. Its annual financial performance was also affected by “unprecedented” supply challenges in the North American hydrogen network.

“The Company expects that its current cash and available-for-sale securities will not be sufficient to fund its operations over the next 12 months,” Plug said.

The company will need to utilize additional capital to finance its activities.

The company said it is seeking a number of debt capital and project financing solutions, including corporate debt and the US Department of Energy loan program.

The Latham, New York-based Plug newspaper said that cash and cash equivalents at the end of September 30 amounted to $110.8 million.

“Although we believe Plug Power can weather its current cash flow issues, the current operating and capital markets environments are challenging and we believe PLUG shares are likely to be range-bound over the next few quarters until clarity around its balance sheet is resolved,” he said. Bill Peterson, analyst at JPMorgan.

Plug on Thursday also reported a wider loss for the three months ended Sept. 30, and its revenue of $198.7 million widely beat estimates of $228.2 million, according to LSEG data.

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(Reporting by Tanay Dhumal in Bengaluru – Prepared by Mohammed for the Arabic Bulletin) Editing by Maju Samuel

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