FORT LAUDERDALE, Fla., Oct. 21 /PRNewswire-FirstCall/ -- Ener1, Inc.
(OTC Bulletin Board: ENEI) and Delphi Corp. (NYSE: DPH) have completed a
transaction to combine their lithium battery operations into a new company.
Ener1 and Delphi expect the new company to benefit from their complementary
technical resources, intellectual property and manufacturing assets. The new
company will pursue opportunities for high-energy, long-life lithium batteries
in diverse markets including power tools, automotive, uninterrupted power
supply, medical devices, personal mobility and military applications.
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The new company's name, EnerDel, builds upon the venture's capability to
deliver new solutions for stored energy and battery power. EnerDel will
emphasize the significant performance, size and cost advantages of lithium
battery technologies developed by Ener1 and Delphi. Ener1's nanotechnology-
based vapor deposition process is expected to offer substantial cost
advantages for EnerDel's new battery products due to greater choice of
potential electrode materials, faster production times and elimination of
binders and coating materials in the production of lithium batteries.
Kevin Fitzgerald, Ener1's Chairman and CEO, said: "EnerDel will capitalize
on the best aspects of Ener1's and Delphi's lithium battery patent portfolios,
which provide the technology foundation for EnerDel to create innovative
lithium battery products and market them competitively. Our battery cell
production skills are complemented by Delphi's design and production team,
cell packaging, systems design and large-scale production expertise. These
advantages are now unified in a single company, whose performance risk we
believe is reduced because of the combined talents and assets available to it.
We expect great things from EnerDel."
"EnerDel's low-cost technologies, substantial manufacturing assets and
proven quality manufacturing and delivery systems will be significant
marketing advantages," said Pankaj Dhingra, Delphi's energy management systems
business line executive.
Ener1 owns 80.5 % of EnerDel's common stock, and Delphi owns 19.5%.
Delphi also received EnerDel 8.25% Series A Preferred Stock with a 90 day
right to exchange some or all of the preferred for Ener1 common stock at a
price of $1.15 per share. Also as part of the transaction, Delphi obtained
warrants to purchase up to 7 million shares of Ener1 common stock. Initially,
Delphi will have one representative on the EnerDel board of directors, which
will have six members.
As part of the transaction, Ener1 invested $15 million in cash into
EnerDel for working capital. The funds were provided through an Ener1
financing arrangement totaling $18 million. The structure of the financing is
a private placement of Ener1's redeemable preferred stock, along with warrants
to purchase shares of Ener1 common stock at $1.25 per share and $1.50 per
share. In connection with the initial $15 million, Ener1 issued warrants to
purchase approximately 4.17 million shares of Ener1 common stock at $1.25 per
share and approximately 4.17 million shares at $1.50 per share. Once the
financing is completed, warrants totaling 5 million shares at the $1.25
exercise price and 5 million shares at the $1.50 exercise price will have been
issued. The lead investor in the financing is a Swiss company that will hold
the shares for the benefit of an affiliate of Ener1 and Ener1 Group, Inc.,
Ener1's majority shareholder.
Mr. Fitzgerald also remarked on Ener1's financing: "We are very gratified
to have been able to raise the financing for our investment in EnerDel on
favorable terms, given today's capital markets. The terms of the preferred
stock financing that we used to fund this transaction are indicative of the
continuing support and confidence of our majority shareholder. In addition,
we also expect that this transaction will reduce Ener1's overhead costs and
EnerDel will be headquartered in Ft. Lauderdale, Florida, but will also
utilize Delphi's lithium battery facilities in Indianapolis, Indiana and
Delphi's established suppliers, in addition to Ener1's battery, nanotechnology
and raw material processing facilities in Ft. Lauderdale. EnerDel will have
access to Delphi's electronics, packaging, and systems engineering expertise.
EnerDel may also establish large scale manufacturing facilities in low-cost
foreign locations in the future to handle high volume production. EnerDel's
production management team is experienced in setting up successful offshore
production operations, having done so on several occasions for Delphi's
About Ener1, Inc.
Ener1, Inc. (OTC Bulletin Board: ENEI) develops and markets new
technologies and products for clean, efficient energy sources, including high-
energy lithium batteries and components, through EnerDel, its majority-owned
venture with Delphi Corp. Ener1 also develops and markets nanotechnology-
based materials and manufacturing processes and fuel cell systems and
components. Ener1's technologies and products have applications for markets
that include power tools and industrial equipment, medical devices, hybrid
vehicle propulsion and military communications. For more information on
Ener1's technologies and products, visit its Web site at http://www.ener1.com
or call (954) 556-4020.
For more information about Delphi and its operating subsidiaries, visit
Safe Harbor Statement (Ener1, Inc.)
This release contains forward-looking statements within the meaning of the
Federal Private Securities Litigation Reform Act of 1995 conveying
management's expectations as to the future based on plans, estimates and
projections at the time the statements are made. The forward-looking
statements contained in this press release involve risks and uncertainties,
including, but not necessarily limited to, the ability of Ener1 and EnerDel to
successfully develop and market proposed lithium battery products and
services, the degree of competition in the market for lithium battery products
and services, Ener1's history of operating losses, the lack of operating
history for the development stage battery business or EnerDel, the potential
need for additional capital, the dependency upon key personnel and other
risks detailed in Ener1's annual report on Form 10-KSB for the year ended
December 31, 2003, as well as in its other filings from time to time with the
Securities and Exchange Commission. These risks and uncertainties could cause
actual results or performance to differ materially from any future results or
performance expressed or implied in the forward-looking statements included in
this release. Neither Ener1 nor EnerDel undertakes any obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise.
Delphi Forward-Looking Statement
All statements contained or incorporated in this press release which
address operating performance, events or developments that we expect or
anticipate may occur in the future (including statements relating to future
sales or earnings expectations, savings expected as a result of our global
restructurings or other initiatives, portfolio restructuring plans, volume
growth, awarded sales contracts and earnings per share expectations or
statements expressing general optimism about future operating results) are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are made on the basis of
management's current views and assumptions with respect to future events.
Important factors, risks and uncertainties which may cause actual results to
differ from those expressed in our forward-looking statements are discussed in
detail in our filings with the Securities and Exchange Commission, including
our annual report on Form 10-K for the year ended December 31, 2003. In
particular, the achievement of projected levels of revenue, earnings, cash
flow and debt levels will depend on our ability to execute our portfolio and
other global restructuring plans in a manner which satisfactorily addresses
any resultant antitrust or labor issues and customer concerns, any contingent
liabilities related to divestitures or integration costs associated with
acquisitions, and other matters; the success of our efforts to diversify our
customer base and still maintain existing GM business; the continued
protection and exploitation of our intellectual property to develop new
products and enter new markets; and our ability to capture expected benefits
of our cost reduction initiatives so as to maintain flexibility to respond to
adverse and cyclical changes in general economic conditions and in the
automotive industry in each market we operate, including customer cost
reduction initiatives, potential increases in warranty costs, pension
contributions, healthcare costs, disruptions in the labor, commodities or
transportation markets caused by terrorism or war and other changes in the
political and regulatory environments where we do business. Delphi does not
intend or assume any obligation to update any of these forward-looking
SOURCE Ener1, Inc.