Deals: Investor agrees to independence pact

GERMANY: A desire to preserve its independence from utilities or manufacturers has led a wind developer to prohibit its new investor from selling shares or convertible bonds to such companies.

PNE: restricting Luxempart share and bond sales
PNE: restricting Luxempart share and bond sales

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German developer PNE Wind has locked in investment company Luxempart, which it says it has taken on board to boost the speed of its business growth, especially in wind station planning - both offshore and abroad.

Luxempart, which is listed on the stock exchange of tiny European country Luxembourg, has agreed to refrain from selling any of its newly acquired shares and convertible bonds, equivalent to about 15% in PNE, for three years from May 2010.

"PNE Wind is a successful company in part due to its independence - it is not linked to utilities or manufacturers - and wants to avoid a situation where Luxempart sells the shares or convertible bonds to utilities or manufacturing companies, at least for three years," Luxempart director Alain Huberty says.

"In fact, we intend to be a long-term investor so this could be (extended) to at least five, seven or ten years."

Further growth

Luxempart's involvement has taken place in the course of two capital measures for financing further growth, which were completed in mid-June.

The first measure was a capital increase through issuance of 1,249,500 new shares and the second, running in parallel, was issuance of a EUR26 million convertible bond (loan) carrying an interest rate of 6.5% which can, if desired, be converted into new shares at a price of EUR2.2/share up to a deadline of the end of 2014.

The two measures together resulted in EUR28.5 million (gross) flowing into PNE Wind.

The bonds and shares were first offered to PNE's existing shareholders, with Luxempart taking up those not snapped up by existing shareholders.

Huberty says it was theoretically possible that existing stakeholders could take up all the new shares, but the convertible bond tranche offered of nearly EUR30 million was large enough to accommodate both stakeholders and Luxempart's intentions.

As it turned out, existing shareholders took only 322,386 of the new shares, so Luxempart was able to sign up for 927,114 of the new shares.

As part of the deal, Luxempart is to take two seats on PNE's supervisory board.

The holding in PNE complements other renewables activities in Luxempart's energy portfolio.

It has a 4% stake in Societe Electrique de l'Our, which owns 35MW of wind power, 47MW of hydro plants and 850MW of hydro-pumped storage capacity. It also has a 10% stake in French company Poweo, which boasts 100MW of wind and hydro plants.

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