In addition, it holds majority and minority shares in 18 companies. Broad-Ocean produces more than 50 million motors annually for customers on 5 continents, including King Long, Yutong, Van Hool, BAE Systems, SAIC Motor, FAW, Dongfeng, General Motors, Ford, Volvo, Fiat, TATA, Cummins, Caterpillar, Carrier, Trane, Daikin, Goodman, Gree and Midea.

Broad-Ocean’s fourth business unit—EV Operations Platform—operates a commercial vehicle leasing business in China through which it buys new energy vehicles, including electric vehicles, and subsequently leases these buses and commercial vehicles. Broad-Ocean has now expanded this business to include fuel cell vehicles.

On 18 July 2016, Broad-Ocean signed an agreement with Guangdong Nation Synergy Hydrogen Power Technology Co. Ltd. relating to the purchase of 10,000 fuel cell vehicles, including buses and delivery trucks, all of which are expected to have Ballard’s leading PEM fuel cell technology inside.

A strategic collaboration framework agreement between Ballard, Broad-Ocean and Synergy was also signed, encompassing a number of collaboration activities conducted on commercial terms in China, including:

• market development activities and product development for hydrogen fuel cell vehicles, including buses and commercial vehicles;

• potential license and local assembly of Ballard fuel cell modules by Broad-Ocean in selected Chinese cities;

• integration of Ballard fuel cell modules with Broad-Ocean EV drive systems to provide customers with turnkey fuel cell engines; and

• leveraging of Broad-Ocean's global operations and supply chain infrastructure to lower the cost of Ballard fuel cell engines and the cost of integration with vehicle drivetrains.

Final collaboration agreements encompassing detailed terms and conditions are expected to be signed by the end of 2016.

The Broad-Ocean investment will be made through a subscription and purchase of 17,250,000 common shares issued from treasury at a price per share based on a 20-day volume weighted average price calculation (the calculated price per share is US$1.64), and representing approximately 9.9% of Ballard’s outstanding common shares following the transaction.

Ballard will use the proceeds from the financing for general corporate purposes, including potential funding of future acquisitions or investments in complementary businesses, products or technologies. This transaction is expected to close in Q3 2016, subject to customary closing conditions and regulatory approvals.

We are pleased to welcome Broad-Ocean as a long-term strategic shareholder. We look forward to benefiting from its EV expertise, customer base, scale of operations and supply chain strength, in addition to its demand pull-through of fuel cell vehicles. The decision by Broad-Ocean to engage in a strategic collaboration is a validation of our strategy in China and also recognizes the synergies that are possible between our enterprises.

—Randy MacEwen, Ballard President and CEO

Ballard has world-class PEM fuel cell technology, talent and intellectual property, a strong brand and excellent market positioning. We share a similar vision about innovation to support clean energy applications and believe the opportunity for hydrogen fuel cells in China is entering a new growth phase. Our experience, leadership and operating assets in the EV business in China and globally will provide Ballard with unique opportunities to accelerate its business, including scale, cost reduction and execution capabilities. Our recent order of 10,000 fuel cell vehicles will feature Ballard fuel cell technology. We look forward to supporting Ballard with a long-term collaboration in China and globally.

—Charles Lu, Founder and Chairman of Broad-Ocean

Broad-Ocean and Ballard have also entered into an Investor Rights Agreement under which Broad-Ocean has agreed to a two-year hold period on the 17,250,000 Ballard common shares that it purchases in the financing; has provided Ballard with a right of first refusal to sell Broad-Ocean additional treasury shares if Broad-Ocean wishes to increase its ownership position up to 20%; and has agreed to a two-year “standstill” under which it will not purchase more than 19.9% of Ballard’s outstanding common shares without receiving Ballard board approval. Ballard has granted Broad-Ocean anti-dilution rights to maintain its 9.9% ownership interest. Finally, Broad-Ocean has no special right to appoint nominees to Ballard’s board of directors.

Upon closing, Broad-Ocean is expected to become Ballard's largest shareholder and join existing investors United Technologies Corporation, Anglo American Platinum Limited and Nisshinbo Holdings Inc. as strategic shareholders of Ballard.