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LM Glasfiber responds to accusations over Initial Public Offering

LM Glasfiber's Initial Public Offering (IPO) was not sold out when the company decided to cancel the IPO on May 3 (Windpower Monthly, June 2002), says managing director Anders Christensen. He declines, however, to name the potential purchasers who had registered bids. Christensen also defends Doughty Hanson against criticism, levelled by stock market analysts, that the British investment company was effectively only investing EUR 40.35 million. Doughty Hanson, says Christensen, was and is underwriting LM loans of EUR 188.5 million. Furthermore, LM's debt of EUR 350 million is not creating acute economic problems for the company since the loans run to 2009 and 2012. Neither does he agree with Dansk Aktie Analyse, a Copenhagen stock analyst company, when it says that profit margins are less than stated by LM Glasfiber. "Our profit before tax and interest was 14.1% in 1999 when we financed a growth of 92%, 14.5% in 2000, when we had large one-off items to account for, and 18.4% in 2001," says Christensen. Given the wind industry's typical investment each year of 8% of turnover, LM's earnings are on a par with those of Vestas, for example. Furthermore, Christensen says it is an advantage, also for shareholders, that LM would use the cash raised from a flotation to reduce its debt. That shows LM to be in good economic health and he believes another flotation will be attempted in the future.

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