July 31, 2000
Thermoelectric Inc., both of Calgary, Alberta, announced today
that they have established a strategic alliance to develop and
distribute natural-gas-fueled fuel cell products suitable for the
supply of electric power and heating to individual residential
homes. Fuel cells are an evolving new technology capable of
transforming certain fuel sources directly into electric power and
heat with high efficiency and reduced emission of greenhouse
gases.
Global has successfully tested a prototype unit capable of
providing the base load power requirements of a residential home.
Under the terms of the alliance, Enbridge will invest Cdn$25
million in Global to fund further technology, design and product
development work required to reach a commercial launch of the
residential units. Enbridge will contract with Global to provide
commercial input into the product design and development phase
with respect to the residential market, and will have exclusive
distribution rights for the resulting products for all of Canada.
Global will retain control over the development process and will
own the technology, designs, patents and trademarks.
Brian F. MacNeill, President & Chief Executive Officer of
Enbridge, said, "We believe this alliance represents a very
significant opportunity which will enhance our growth and
leadership as an energy delivery and services company. Fuel cell
technology is rapidly evolving to the point where it can provide a
clean, economical alternative to large power plants in meeting
homeowners' needs for reliable electric power. Utilizing the
surplus heat from the cell to provide hot water or space heating
further enhances the efficiency. Global has achieved some
important advances in fuel cell technology, which we have
independently verified, and is well positioned to achieve
leadership in residential cogeneration applications."
Mr. MacNeill also said, "We are particularly impressed with
Global's solid oxide fuel cell (SOFC) technology because it
operates very effectively when fueled with natural gas and
therefore complements our increasing focus on natural gas delivery
and services. The additional gas required to supply residential
fuel cells will most directly benefit our gas distribution
businesses in Ontario, Quebec and New Brunswick, and our
affiliates in Quebec and Alberta, through increased efficiency
from higher volume. Our gas gathering and processing and pipeline
investments will also benefit. The greatest benefit of all may be
the opportunities which this new product will present to our home
services business for growth in sales, installation and servicing
revenue from exclusive distribution rights throughout Canada. The
potential for our Ontario franchise alone is significant given our
access to some 1.5 million customers. We are also very excited
about the opportunity which this product will provide for
individual Canadians to contribute directly to greenhouse gas
reduction."
Jim Perry, President of Global Thermoelectric, said, "We have
entered into this strategic alliance because Enbridge brings
significant strengths and capabilities that will allow us to
accelerate the commercialization of our SOFC distributed power
systems, especially for home use. We've already achieved the
necessary advances in the laboratory to establish the technical
feasibility of residential scale fuel cell cogeneration. With the
funding from Enbridge, their knowledge of the home market and
their distribution capabilities we have the necessary ingredients
to move from the laboratory into the marketplace. At the present
time, Global is establishing Canada's first SOFC production plant
and in 2001 we will be delivering units to Enbridge to commence
field testing."
Mr. Perry also noted, "The fuel cell systems developed by Global
are based on high-power density SOFC technology which has the
unique benefits of producing high-grade heat and of easily using
natural gas. Global's fuel cell technology development will
facilitate high-volume low-cost production to ensure that the end
product is attractive to customers."
Under the terms of the alliance, Global has issued Cumulative
Redeemable Convertible Preferred Shares ("the Preferred Shares")
to Enbridge for gross proceeds of Cdn$25 million. The Preferred
Shares will be redeemable and convertible into common shares.
During the first five years, the Preferred Shares are convertible
at a price of $30.96 per common share and thereafter the
conversion premium increases after years 5, 10 and 15. The
Preferred Shares carry an initial maximum dividend rate of 5% per
annum, which decreases with specified increases in Global's share
price. For each $5 increase in share price above the initial
conversion price, the dividend rate will decline by 1% to a
minimum of 1%. TD Securities acted as financial advisor to Global
Thermoelectric in developing the strategic alliance with Enbridge.
Global Thermoelectric is a world leader in the development of
solid oxide fuel cell technology. The Calgary-based company is
also the world's leading manufacturer and distributor of
thermoelectric generators for use in remote locations, and
produces the most advanced personnel heaters in the defence
industry. Global common shares trade on The Toronto Stock Exchange
under the symbol "GLE". Additional information about Global
Thermoelectric is available on the company's web site at
Enbridge Inc. is a leader in energy transportation, distribution
and services. As a transporter of energy, Enbridge operates, in
Canada and the U.S., the world's longest crude oil and liquids
pipeline system. The company also is involved in liquids
marketing and international energy projects, and has a growing
involvement in the natural gas transmission and midstream
businesses. As a distributor of energy, Enbridge owns and
operates Canada's largest natural gas distribution company; and is
involved in the distribution of electricity. In addition,
Enbridge provides retail energy products and services to a growing
number of Canadian and U.S. markets. The company employs
approximately 5,500 people, primarily in Canada, the U.S. and
South America. Enbridge common shares trade on The Toronto Stock
Exchange in Canada under the symbol "ENB" and on The NASDAQ
National Market in the U.S. under the symbol "ENBR". Information
about Enbridge is available on the company's web site at
A conference call will be held on Monday, July 31, 2000, at 8:45
a.m. EDT (6:45 a.m. MDT) to provide further information. The call
will be web-cast live and available on the Enbridge web site at
www.enbridge.com/investor and on the Global web site at