CALGARY, Alberta, Nov 19 (Reuters) - Global Thermoelectric Inc. said on Tuesday it may sell the fuel cell unit that had once made it a potential star in the alternative energy field.
The Calgary-based company said that while it believed its solid oxide fuel cell (SOFC) technology system was becoming a scientific success, it would need "significant additional expenditures" to make it commercially viable.
Investors who once warmed to fuel cell companies like Global Thermoelectric have battered those shares over the past two years amid fears the environmentally friendly technology will never get out of the development stage.
Global Thermoelectric's shares closed at C$2.16 on Tuesday before its announcement, having risen above $44 in early 2000 when it was still in the early stages of developing its technology.
The company said on Tuesday it has hired the investment firm Salomon Smith Barney to explore the possible sale of its SOFC division or to find a partner to develop the technology for commercialization.
At least one analyst recently said one of Global's most valuable assets was actually its cash reserves, which the company estimated on Tuesday were about C$101 million, or C$3.42 per share. It has about C$208,000 in long-term debt.
The company said on Tuesday it plans to use some of that cash to buy back up to 1.45 million shares, or about 5 percent of its common shares outstanding.
Global Thermoelectric said it was also cutting costs by reducing staffing levels in non-core projects by 30 percent. It's statement on Tuesday did not estimate how many jobs would be lost or how much money it expected to save.
The fuel cell industry has been hit by several shakeups. Plug Power Inc. announced this month that it would buy rival H Power Corp. , while Ballard Power Systems said it was trimming some development work to speed other products to market.
Fuel cells produce energy through electrochemical reaction rather than mechanical action, such as with an internal combustion engine.
$1=$1.58 Canadian)