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Germany

Germany

Expansion plans include going public -- Wind investment as tax haven

German wind plant developer Wind 7 is expanding its capital base through an issue of 458,000 registered shares with a nominal value of EUR 10 apiece. Once sold, the company's capital stock will increase by EUR 0.42 million to EUR 4.58 million. The extra capital will enable Wind 7 to buy a number of wind station projects worth up to five times its equity capital, the company says. Assuming the capital increase brings in EUR 4.5 million, the company will further borrow money to allow it to invest EUR 22 million in new projects.

The Wind 7 prospectus lists 21 projects in six German länder with a combined capacity of 91.54 MW for installation by summer 2001. These involve turbines built by DeWind Technik, Enercon, Frisia, Jacobs Energie, NEG Micon and Nordex. Wind 7 warns, however, that because projects will not be developed until 2001 or later, a loss is expected for fiscal year 2000. Last year its losses were EUR 26,000.

Further capital increases are planned to increase Wind 7 capital to EUR 10 million in 2001 and to EUR 20 million in 2002, providing financing for wind projects worth EUR 45 million in 2001 and EUR 90 million in 2002. The company is planning a stock exchange listing.

Wind 7, founded in September 1999, consists of seven developers. The motivation for creating the stockholding company was a change in fiscal laws making wind plant investments less attractive as tax avoidance schemes. Wind 7 now hopes to attract small time investors. "They can't write off losses but can earn tax free from stock price gains," it says. In the long term, a stockholding company can achieve better returns on equity capital and turnover than a GmbH or Co.Kg, adds Wind 7 chairman Dirk Jesaitis. But investors in wind power companies do face political and technical risk, he stresses.

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