Convertible bond to strengthen international growth

solar park
Photo: ABO Wind AG

(Wiesbaden, December 4th, 2017) ABO Wind’s Managing Board and Supervisory Board will ask the company’s shareholders to approve the issuing of a convertible bond during an extraordinary general meeting on Wednesday, December 20th. “The company’s excellent situation and development provide favourable conditions to attract additional investors in our company,” says Managing Director Dr Jochen Ahn. “With a price-earnings ratio of less than six, the stock market valuation does not reflect the strength of our company adequately,” says Dr Ahn. This makes the immediate placement of new shares less attractive, while placing a convertible bond is an interesting alternative. For 2017, the company predicts a profit equally as high as the previous year. The prospects for the following years are also good, although the Managing Board expects the profits to be slightly lower than in the record years of 2016 and 2017. 

ABO Wind feels well prepared to master the currently difficult conditions in Germany, which mainly affect turbine manufacturers. “We opted for diversification three years ago and have expanded our international activities, which we are now profiting from.” Until 2016, international business made up about a third of the company’s turnover. This year, its share will rise to half of ABO Wind’s turnover, and prospectively to two thirds in the medium term. “Germany will remain our most important market. We compensate for its fluctuations with extensive international activities,” says Dr Ahn. For many years, ABO Wind has successfully been active in France, Ireland and Finland. Recently, business in Argentina has also been very good, and smaller deals have been made in Spain. The Managing Director is optimistic that the conditions in Germany will continue to make it possible for an experienced specialist such as ABO Wind to successfully develop renewable energy projects.

While the availability of liquid funds is excellent, ABO Wind seeks to address the capital market at short notice from a position of strength. With the approval given during the general meeting on December 20th, a convertible bond with a volume of at least ten million euros is expected to be placed in the spring of 2018. During the expected two-year term subscribers can turn the bond into shares at a conversion price of between 15 and 20 euros.

With the issuing proceeds, ABO Wind intends to expand its international activities in additional countries. In recent years, the company has started to develop wind energy and photovoltaics projects for example in Iran, Canada, Tanzania, Tunisia and Greece. In countries such as France, Spain or Argentina, PV development now complements the wind energy business. Due to shorter planning cycles, many PV projects are nearly ready for construction. The first smaller Iranian PV park has been connected to the grid, larger projects are far along in the planning process. In Tunisia, ABO Wind is currently applying for remuneration via a tender. Successfully placing the bond would accelerate international growth and enable the company to pre-finance projects independently.

On the medium term, die convertible bond is meant to raise equity. ABO Wind has always been characterised by a high equity rate. During the financial year it was at 55 per cent including mezzanine capital. “We care about maintaining the soundness of our balance sheet ratios even while significantly increasing of our international business activity. This is another aspect the issuing of the bond can help us with,” says Dr Ahn.


Alexander Koffka

Alexander Koffka

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