News

April 11, 2006

Plug Power To Receive $217 Million Cash Investment From Interros And Norilsk Nickel

By: by Maureen Dempsey, APCO Worldwide

Source:

LATHAM, NY — April 11, 2006 — Plug Power Inc. (NASDAQ: PLUG), a leader in providing clean, reliable on-site energy products, announced today that Interros, a major Russian investment firm, and Norilsk Nickel, the world’s largest producer of nickel and palladium, agreed to make a $217 million cash investment in Plug Power.  The investment is being made through Smart Hydrogen, a joint venture of the principal Interros investors and Norilsk Nickel, which was formed to participate in the global hydrogen economy. 

“We view this as a transformational investment for Plug Power,” said Dr. Roger Saillant, president and chief executive officer of Plug Power.  “After this investment closes, Plug Power will have approximately $285 million in cash and marketable securities and be well positioned to accelerate and broaden our business strategy. We are extremely grateful to our employees, investors, customers, partners and suppliers who collectively have positioned our company as a leader, enabling Plug Power to attract this ground-breaking investment.” 

The parties have entered into a definitive agreement for the investment and the transaction is expected to close this summer, subject to approval by Plug Power’s shareholders, regulatory approvals, including Hart-Scott-Rodino antitrust clearance, and customary closing conditions.

“With the aim of pursuing a significant investment, in early 2005 we began a nearly year-long review of the global fuel cell industry to identify what we believe to be the best companies in the industry,” said Vladimir Potanin, president of Interros. “The result of this exhaustive industry review resulted in our approach to Plug Power and this transaction.”

Following the closing of the transaction, the parties intend to explore opportunities regarding how Interros and Norilsk Nickel can add value to Plug Power, specifically in the areas of technology and distribution.

For Interros and Norilsk Nickel, the investment in Plug Power reflects a convergence of multiple needs and opportunities.  As one of the world’s largest suppliers of precious metals, including the largest producer of palladium for industrial use and the fourth largest producer of platinum, Norilsk Nickel expects to see significant benefit as the success of fuel cell technology results in the broader use of palladium and platinum.  In addition, Norilsk Nickel’s mining activities and other operations in remote sections of Russia create significant need for reliable and affordable energy production, an end market potentially served by the use of fuel cells.

“Norilsk Nickel has long supported fuel cell technology research, and our investment in Plug Power demonstrates this commitment,” said Michael Prokhorov, director general of Norilsk Nickel and a principal investor in Interros.  “We believe in Plug Power’s potential, and in the potential of the hydrogen economy and look forward to helping Plug Power continue its advancements in fuel cell technology.”

Plug Power expects to receive cash of $217 million in exchange for shares of Class B Capital Stock that are convertible into 39.5 million shares of common stock.  The purchase price per share of common stock in the transaction, on an as-converted basis, is $5.50.  The Class B Capital Stock will be a new class of stock that is economically equivalent to, and convertible into common stock.  The terms of the Class B Capital Stock and the investment include certain approval and other rights and certain standstill and other restrictions.  Pursuant to these rights, the investors initially will be able to appoint up to four of the eleven directors on Plug Power’s board of directors.

In December 2005, the investors purchased approximately 2.7 million shares of Plug Power common stock from General Electric.  Concurrent with the closing of the new investment, the investors are expected to purchase 1.825 million shares of Plug Power common stock from DTE Energy Foundation.  Immediately following the closing of the investment transactions, on a combined basis, the investors are expected to hold approximately 35% of Plug Power’s outstanding common stock on an as-converted basis. 

Plug Power has scheduled a conference call today at 9:00 AM (EDT) to review the details of this transaction.  Interested parties are invited to participate. To listen to the conference call, please call 617-597-5342 and enter the pass code 7584 (PLUG). The webcast can be accessed by going directly to the Company’s Web site at www.plugpower.com and selecting the conference call link on the home page. A playback of the call will be available on the company’s Web site for a period following the call. See the Company's Form 8-K filed with the Securities and Exchange Commission on April 11, 2006 for additional information. For more information about Plug Power and this transaction please visit www.plugpower.com.

Plug Power is advised by Stephens Inc. as financial advisor and Goodwin Procter LLP as legal counsel.  Interros and Norilsk Nickel are advised by Citigroup Inc. as financial advisor and Baker Botts LLP as legal counsel.

About Plug Power

Plug Power Inc. is an established leader in the deployment of clean, reliable, on-site energy products. More than 650 Plug Power fuel cell systems have been delivered to customers worldwide in commercial, public sector, telecommunications, utility and uninterruptible power supply markets. For more information about how to join Plug Power’s energy revolution as an investor, customer, supplier or strategic partner, please visit www.plugpower.com.