Dutch enter Danish offshore tender -- Up against two heavyweights

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For the first time, foreigners are competing against Danes in an offshore wind development in Denmark. The country's next government sponsored offshore wind power station, a 200 MW extension to the existing Nysted development in the Baltic Sea, has attracted a Dutch consortium as well as a Swedish utility among the four potential developers. All have registered their intention to bid for the contract to build and operate the project.

The Dutch consortium consists of marine building concern Ballast Nedam Infra BV and renewables developer Evelop BV. The former is part of the consortium developing the 99 MW Near Shore Windfarm (NSW) in the Netherlands. Evelop is a subsidiary of Econcern, a company that recently took over the development of the 120 MW offshore wind farm Q7-WP from Dutch renewables agency E-Connection.

This group has three competitors: Danish utility Elsam Kraft A/S, which owns and operates the 160 MW Horns Reef offshore wind plant in the North Sea; a consortium behind the existing 165 MW Nysted offshore wind farm, including utility Energi E2 A/S, Danish Oil and Natural Gas (DONG) and Swedish utility Sydkraft AB; and Rødsand II, a consortium of seven small wind project development and investment firms comprised of Skovgaard Invest, Petri Holding, Dansk Vindenergi, PMN Holding, GK Gruppen, Vindenergi and Wind Investment. Rødsand II consists of the same companies behind the Horns Rev II consortium that is competing for the 200 MW Horns Reef extension -- the Danish government's other current demonstration project out to tender (Windpower Monthly, October 2004). A decision is expected by mid-February.

The prequalification round brings an end to industry speculation as to whether Siemens would actively compete as a developer after its takeover of Danish wind turbine manufacturer Bonus. The existing Nysted offshore wind farm was built with Bonus wind turbines.

Parallel projects

The application deadline of January 14 fell ten days after the tender deadline for the 200 MW Horns Reef extension. Delivering bids were Elsam, Energi E2 and Horns Rev II. The fourth candidate, DONG, stepped out of the race due to its planned merger with Elsam, according to the Danish Energy Agency.

That DONG has now entered into a new tender against Elsam has to do with location and nothing to do with a merger, according to the company itself.

Elsam -- which already operates the first Horns Reef wind farm -- has an advantage there, explains DONG's Henrik Balle. "We see [the new Nysted plant at Rødsand] as an extension of the wind plant in which we are already involved, and to which we hope to cover all new possibilities."

Recapitalisation plan

Nordex gets back on its feet

In the wake of a major restructuring program, German wind turbine manufacturer Nordex is close to securing its "urgently needed" recapitalisation. Banks already financing Nordex and a group of investors led by private equity company Capital Management Partners (CMP), and including investment bank Goldman Sachs, have signed agreements to participate in the recapitalisation plan which will be implemented following a vote at a shareholders meeting later this month. "This will put us back on a normal footing," says Nordex' spokesman Ralf Peters. "We'll have a creditworthiness such that customers are happy to do deals with us again."

He admits several contracts have been lost because banks have been unwilling to carry the extra risk associated with a "financially-wobbly" turbine supplier. "The current weak balance sheet structure and limited liquidity for the interim financing of projects constituted an obstacle to a larger business volume," says the company.

addressing problems

Assuming shareholders rubberstamp the plan, the investor group will hold a majority stake in Nordex. This will be at least 52% and will be held for up to five years, while the company builds in strength and value. Under the terms of the deal and Germany's "restructuring privilege" regulations, the new investors are exempt from having to make a takeover bid for the company, enabling the new investors to acquire the majority share without buying out the rest of the shareholders. This means the new money will go into the company to address problems rather than into the pockets of the existing shareholders.

The plan involves a number of steps. First, the existing 52 million Nordex shares will be reduced at a ratio of 10:1 to reflect the value of the company at the turn of the year

Nordex equity stood at about EUR 5 million, or around one-tenth of the nominal value of the 52 million EUR 1 stakes. The new investors will then subscribe to up to 30 million new shares in a planned cash capital increase of at least 30 million, and up to 41.64 million new shares at a subscription price of EUR 1. They also have the option to take up another 10 million shares offered by Nordex.

Then one of two things will happen. The banks financing Nordex will partially waive debt to the tune of EUR 27.8 million in return for up to 12 million new shares, or participate in a solution with "comparable economic effect," they say.

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