Danish electrolyser manufacturer Green Hydrogen Systems has announced a plan to file a petition for court restructuring because it could not secure sufficient funding to keep its business running.
The equipment produces hydrogen through a chemical process (electrolysis) capable of separating the hydrogen and oxygen molecules of which water is composed, using electricity.
“The aim of the in-court restructuring is to explore whether a basis can be established which allows for all or part of the Company’s operations to continue, including a sale of all or parts of the Company’s assets,” the company said in a press statement on March 9.
In response to the news, shares of the company, already at a low point, tumbled.
Green Hydrogen Systems has been struggling because its technology and hydrogen-related projects have not gained commercial traction as quickly as expected.
The development and take-up of its X-Series electrolyser have also been slower than planned and the overall “green” hydrogen market has faced setbacks. As a result, the company’s financial situation has worsened in recent months.
“Green Hydrogen Systems has been executing on the restructuring plan since the fall of 2024 to secure the company’s future, and while this has been progressing satisfactorily, it has not been possible to raise the necessary capital,” said the chairman of the company Thomas Broe-Andersen.
“Therefore, the Board of Directors finds it necessary to enter into an in-court restructuring.
“Green Hydrogen Systems has a unique product and the potential to play an important role in the future hydrogen market and in the green transition.
“We continue to believe that this potential could have been realised had the financing been secured. Therefore, it is regrettable that the company has not been able to raise sufficient funding. I would like to thank all the employees, the management, and the Board of Directors, for their dedicated work in the last months,” Broe-Andersen said.
The failure follows the bankruptcy of two units of Denmark’s struggling solar-farm developer, Better Energy — a collapse that has sent shockwaves through the Danish financial system since December, Bloomberg reported.
Green Hydrogen Systems develops electrolysis plants for hydrogen production, a technology seen as a key part of the future energy system and the so-called green transition.
Clean energy companies have faced serious challenges, even with high-profile financial backing and lavish government subsidies.
Green Hydrogen Systems, which counted Denmark’s billionaire Maersk family among its early backers, has struggled with slower-than-expected market adoption of its technology and delays in hydrogen-related production projects.
Late last year, the company secured a short-term loan of 80 million Danish kroner (€10,73 million) and aimed to raise 300 million kroner (€40 million) in equity but that effort has now failed, GHS was forced to admit.
Among its investors was Danish pension fund ATP, which owns a 6.8 per cent stake, according to its latest earnings report. ATP also holds investments in Better Energy and Northvolt.
Denmark’s biggest pension fund, ATP has been left facing the painful consequences of “green” darling Northvolt’s feared bankruptcy. https://t.co/hASSJPAL9A
— Brussels Signal (@brusselssignal) December 18, 2024
As part of its restructuring, GHS said it would “explore whether a foundation can be established to allow all or part of the company’s operations to continue, including the potential sale of assets”.
GHS was the most high-profile IPO on the Copenhagen exchange in 2021, attracting investors with its ambition to lead in green hydrogen.
Its shares had already plunged 90 per cent from their peak before the restructuring announcement and fell another 90 per cent in March 10 in Copenhagen.
A restructuring is a legal process designed to save a company from financial trouble by restructuring its debts, ownership, or operations. If the restructuring fails, the company may end up in bankruptcy.
The collapse of the company came on the coattails of the implosion of Northvolt, another Scandinavian green darling that made waves in the European Union.
It was also unable to find sufficient funding and has since filed for bankruptcy protection.
The bankruptcy of Swedish battery developer and manufacturer Northvolt is set to cost the European taxpayer a hefty sum. https://t.co/4PRhvG5ExG
— Brussels Signal (@brusselssignal) November 26, 2024
