Hydrogenics Corporation has entered into a subscription agreement with the Hydrogen Company, a wholly-owned subsidiary of Air Liquide S.A, to issue 3,537,931 common shares of Hydrogenics to Air Liquide on a private placement basis, for gross proceeds to Hydrogenics of $20.5m.

The hydrogen (H2) generation technology specialist intends to use the proceeds of the private placement primarily for the purpose of funding current operations, technology developments and future scale-up of partners. Following completion, Air Liquide’s interest in Hydrogenics is expected to be approximately 18.6%.

The subscription agreement means Air Liquide will have pre-emptive rights and the right to nominate one director to the board of directors of Hydrogenics. Air Liquide will be subject to certain restrictions, including lock-up, transfer, standstill and voting restrictions, subject, in each case, either to certain ownership threshold requirements or for a period of one year from the date of the subscription agreement.

Concurrent with the subscription agreement, Hydrogenics also has entered into a technology and business development agreement with Air Liquide to jointly develop PEM electrolysis technologies for growing H2 energy markets around the globe.

The private placement is subject to certain closing conditions, including the receipt of all applicable stock exchange approvals.