Solairedirect pulls $242m IPO on back of weak interest


French solar developer Solairedirect has been forced to scrap its $242 million initial public offering (IPO) on a French solar project due to a lack of demand.

The IPO will no longer be going ahead, read a statement from the French company, after "the order level did not reach the desired volume".

The solar project has not been cancelled, rather Solairedirect will return to it as soon as possible, albeit possibly with a different approach to funding. The share sale was due to close this week, but investors were said to be spooked by the prospect of funding a project in a place that has no government subsidy.

"Solairedirect was brave enough to link shares to projects that ultimately were not backed by subsidies," said BNEF analyst Pietro Radoia. "The problem is that yieldco investors have a long-term, low-risk profile. Selling electricity at spot-market rates does not allow you to have visibility on your cashflows in 15 years’ time."

According to Solairedirect’s CEO Thierry Lepercq, the IPO attracted considerable interest from Nordic and U.S. investors, but insufficient stocks were allocated. The company did not reveal how much bidders had offered, or at what price.

Lepercq admitted that some investors “less acquainted with competitive solar” may have been unaware of Solairedirect’s mode of business, which sees the company develop solar plants without subsidies in several countries globally.

Solairedirect has around 500 MW of solar energy in operation – mostly in France – and takes a minority equity stake in the solar parks it operates.

With a pipeline of 4,500 MW, Solairedirect is expanding into Chile and India, and has earmarked a further 2,000 MW of solar PV in India alone by 2019.

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