What happened 

Shares of natural gas engine technology company Westport Fuel Systems Inc (NASDAQ:WPRT) jumped as much as 15.7% in trading Friday after the company announced a new loan and business agreement. At 11:10 a.m. EST, shares were still up 14% for the day. 

So what

The biggest announcement was a $20 million secured term loan agreement with Export Development Canada. The loan will carry an interest rate of 9% plus fees, which is extremely high in today's low-interest-rate environment, but the rate could fall to 6% if the company meets certain undisclosed milestones. 

Natural gas car being filled with fuel.

Image source: Getty Images.

In a separate announcement, Westport said it has agreed to a memorandum of understanding with Weichai Power that "sets the framework for finalizing the development, marketing, and commercialization" of Westport's direct injection technology in China. A definitive agreement is expected early in 2018. 

Now what

Westport Fuel Systems has been mired with losses for years, and investors are hoping they're seeing the company begin to turn the corner to profitability. In the past year, revenue has been up and losses are declining, so expanding in China could continue the momentum. I'd like to see the company reach sustainable profitability and prove out a natural gas market that can compete with emerging electric vehicles before jumping into the stock, but today's news was an incremental positive nonetheless. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.