Fuel cell maker Dynetek lines up potential sale of company

Calgary — Automotive fuel cell maker Dynetek Industries Ltd. said Monday it has secured a preliminary agreement for the potential sale of the company for about $21 million to California-based S.V. Greentech Private Ltd., on top of three side deals.

Dynetek, which produces alternative fuel storage and refuelling systems, said it has a non-binding letter of intent with S.V. Greentech under which the private company will pay 36 cent per share in cash for every Dynetek share _ a significant premium over its closing at eight cents on Friday.

The deal requires due diligence by S.V. Group as well as customary board, shareholder and regulatory approvals.

In addition to the potential takeover, Dynetek said S.V. Greentech has agreed to buy $431,617 of inventory from Dynetek to help in the startup of a joint venture between the two companies in India, Dynetek India Pvt Ltd.

Dynetek has also agreed to sell S.V. Greentech certain “non-core” fuel cell liner manufacturing equipment for $1.25 million. S.V. Greentech has agreed to buy 2.1 million shares at 36 cents each in a private placement worth $747,000.

Dynetek shares nearly tripled in early trading on the Toronto Stock Exchange, gaining 15.5 cents to 23.5 cents.
© 2011 The Canadian Press