Conergy makes successful stock market debut

17 March 2005

FRANKFURT – Germany’s fast-growing sun power companies are cashing in on the global solar energy boom by making their stock exchange debuts with shares in solar equipment supplier Conergy rising sharply following the group’s listing on Frankfurt on Thursday.

After an offer price of EUR 54, the share price jumped to EUR 71 before sinking back. By early afternoon, the shares were hovering above EUR 67 in what one dealer described as “very lively trading.”

With oil prices soaring and the Kyoto treaty on climate change in place, the world solar power industry is forecast to grow by between 25 and 30 percent annually.

Echoing comments by other analysts, Theo Kitz from the investment house Merck Finck & Co predicted that the booming market for solar energy meant that Conergy shares could continue to rise, with EUR 72 a fair price for each share. The issue of 4.5 million shares was 29 times oversubscribed.

Conergy’s IPO raised about EUR 243 million for the company with its chief executive, Hans-Martin Rueter, having already indicated that the group wanted to use the proceeds from the listing to expand overseas, possibly in Asia and the US.

The Hamburg-based group’s listing on Thursday was the latest in a series of stock market debuts by German sun power companies during recent years. Solar stocks have surged in the last six months on the back of growing optimism that governments around the world will increase support for renewable energy.

Shares in one German group, solar cells maker SolarWorld, jumped by more than 500 percent last year.

In a bid to boost Germany’s renewable energy sector, Chancellor Gerhard Schroeder’s Social Democrat-Green Party coalition last August pushed through Parliament legislation offering federal funding to promote the development of solar, wind, hydro-electric and other renewable energy sources.

Just one month later, the world’s largest solar power station was officially put on stream in the eastern German town of Espenhain with an output equal to the electricity needs of some 1,800 households and highlighting the drive by the country’s solar industry to become the sector’s world leader.

There were more solar power plants installed in Germany last year than anywhere else in the world.

Germany’s solar power industry has also been underpinned by new rules set out in the country’s Renewable Energy Law (EEG) which require electric power companies to purchase the entire electricity output produced by solar stations at prices well above those from conventional power plants.

With the market in Germany for solar power panels roughly doubling last year, the nation’s solar firms have been rapidly expanding, investing about EUR 200 million last year, adding some 5,000 new jobs and helping to improve the prospects for solar project investment funds.

Also reflecting the strong performance of the German sun power business, Conergy sales more than doubled last year to EUR 285 million and analysts are forecasting that the company could enjoy an annual average growth in sales of about 50 percent in the years to 2007.

Thursday’s IPO represents Conergy second attempt at listing with the company forced to pull out of a move to mount an IPO four years ago due to the weak state of the stock market.

DPA

Subject: German news