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Fletcher Energy turbine competitor wants in on the action

By Phil Boeyen, ShareChat Business News Editor

Thursday 13th July 2000

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The successful listing of Fletcher Energy's Capstone investment may prompt a similar deal for a Capstone competitor.

Since listing on the Nasdaq in late June the Capstone stock has risen from US$48 at the end of its first day to recent highs of over $US60.

Fletcher Energy is the largest Capstone shareholder, holding just under 11%, or around 8 million shares.

Now another turbine manufacturer, Honeywell International, is hinting that it may follow in Capstone's wake and spin-off its own small-turbogenerator business.

Honeywell makes the Parallon 75 turbo-generator, which is based on aircraft turbine technology and creates little air pollution compared with diesel-powered backup machines. It is targeted at businesses such as fast-food restaurants and retailers.

Shares of a similar company, Plug Power, have nearly quadrupled since an initial public offering in last year. The company makes fuel cells which produce power efficiently through a chemical reaction.

Fletcher Energy has an agreement not to sell its holding in Capstone until at least the end of the year, when the company will have been public for six months.

After that Fletcher's would need Capstone's permission to sell down its stake, and it says it would expect that permission to be forthcoming.

Overseas reports have already claimed Fletcher's will sell the shares, but while no announcement to that effect has yet been made, the company has repeatedly said that the Capstone investment is not part of its core business of exploration and production.

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