(Yicai Global) Aug. 31 -- Ballard Power Systems, the global leader in hydrogen-powered fuel cell development, recently secured USD163 million investment from Chinese conventional car engine developer Weichai Power.

The pair plans to set up a fuel cell joint venture in China's eastern Shandong province.

They embarked ona partnership on Aug. 29. Weichai will buy about USD163 million worth of Ballard's common shares priced at USD3.55 via subscription to a new stock offering,Ballard's largest shareholder, Zhongshan Broad-Ocean Motor, said in a statement yesterday.

The transaction price, USD3.55, implies a 115 percent premium on the weighted average share price recorded on Nasdaq during the 30 trading days endingAug. 28, per the statement.

Broad-Ocean's Hong Kong subsidiary, a direct shareholder of Ballard, will also subscribe to around 5.6 million common shares worth some USD20 million issued viaa private placement at the same price, in order to maintain its shareholding at 9.9 percent, the statement added.

After the deal, Weichai will own a 19.9 percent stake in Ballard and thus become itslargest shareholder. The current number one shareholder, Broad-Ocean, will be bumped tosecond place, it noted.

Ballard also plans to form a JVwith Weichai in Shandong, where the latteris based, to produce fuel cell stacks and modules for buses, trucks and forklifts.

Weichai's and Ballard's shareholdings in the JV will be 51 percent and 49 percent, respectively. After the companyincorporates, Broad-Ocean will have the right to buya 10 percent stake from Ballard, thereby creating a tripartite fuel cell business alliance.

The introduction of Weichai as an investor will help itpromote hydrogen-powered cellapplications in China, leveraging its strengths in engine design and power system integration and its extensive customer network.

Weichaiformed an alliance on Aug. 29with 12 Chinese firms, higher education institutions and research institutes to stimulate fuel-cell engine and commercial vehicle commercialization technology development and applications to form a world-class, technologically-advanced hydrogen-powered vehicle industry cluster within three to five years, per the statement.

Broad-Ocean obtained the rights toBallard's hydrogen-powered fuel cell technology inthe Chinese market early last year. Construction of its Shanghaifuel cell production facilityhas finished and the plant started deliveries late last year. The firm is preparing to build new production bases incentral Hubei province and Shandong in collaboration with leading Chinese car makers, public information shows.

Editor: Ben Armour