Stuart Energy Systems Hydrogen Fuel Cell Joint Venture, Subsequent IPO

On August 17, 2000, Stuart Energy Systems Corporation (Stuart), a leading developer and supplier of hydrogen generation and supply systems for transportation fuel and industrial applications, announced that it had entered into a joint venture relationship with Cheung Kong Infrastructure (CKI), a subsidiary of Cheung Kong (Holdings) Limited, of which 36 per cent is owned by the Li Ka-shing family. The joint venture relates to the hydrogen fuel equipment sales and services business in the AustralAsia territory. Pursuant to the relationship, CKI agreed to develop a hydrogen fuel infrastructure in the territory to fuel the anticipated market for hydrogen fuel cell cars. Stuart, through the joint venture company, owned 60 per cent by Stuart and 40 per cent by CKI, will be the exclusive supplier of the hydrogen fuel appliances. CKI also increased its equity interest in Stuart to approximately 12.9 per cent (after giving effect to Stuart’s IPO). The Torys team acting for Stuart included Randy MacEwen, Andrew Spence and Tamara Kronis. Simon Romano and Jennifer Legge of Stikeman Elliott acted for Cheung Kong Infrastructure.

On October 5, 2000, Stuart completed an initial public offering of 5.77 million common shares at a price of $26 per share for gross proceeds of $150 million. The underwriters have an over-allotment option to purchase up to an additional 865,500 common shares at $26 per shares, which, if exercised, would bring the total deal size to $172 million. Stuart’s common shares are traded on the TSE under the symbol “HHO”.

Randy MacEwen, Andrew Spence and Catherine Forbes of Torys acted for Stuart. Lawrence Chernin, Gary Kissack and Daniel Bloch of Goodman and Carr LLP acted for CIBC World Markets Inc., BMO Nesbitt Burns Inc., RBC Dominion Securities Inc., HSBC Securities (Canada) Inc. and TD Securities Inc.


Simon A. Romano Jennifer G. Legge Gary F. Kissack Lawrence S. Chernin Daniel N. Bloch