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Thursday, October 28, 2010
Facing default, Hawaii windfarm operator cancels IPO
By Selected News Articles @ 1:50 PM :: 8024 Views :: Energy, Environment, National News, Ethics

REUTERS: Hawaii wind farm operator faces default risk

THE FUTURE: Wind Energy's Ghosts

First Wind cuts forecast on proceeds from IPO: Investors wary of Boston company’s red ink, big debts

By Steven Syre Boston Globe / October 28, 2010  (early today, before IPO was cancelled)

Call it the wind chill factor.

Facing a decidedly cool reception from investors, First Wind Holdings Inc., a Boston developer of big wind farms, yesterday elected to sharply reduce the amount of money it expects to raise from its initial public offering, scheduled for today.

First Wind earlier predicted it would get $24 to $26 a share. Now it expects to sell 12 million shares in the range of $18 to $20 each.

A share price in the middle of that range would reduce First Wind’s IPO proceeds by $72 million to $228 million.

First Wind’s newly public shares were expected to begin trading on the Nasdaq market today. But last night the company and its investment bankers had not yet announced a set price for the shares….

First Wind originally filed documents to go public in 2008, in the midst of the presidential campaign and an enthusiastic national debate about alternative energy development. At the time, the company hoped to raise as much as $425 million.  (Obama bubble)

But First Wind has also produced a lot of red ink. The company, created eight years ago, has lost $233 million and continues to lose money today. It has also piled up $582 million in debt building wind farms and will require more financing to expand in the future.

Those financial facts led to a tepid response from investors, analysts said.

Given the financial tight rope First Wind is walking and its voracious need for financing to build its projects, we believe the risks outweigh the company’s upside,’’ Stephen Simko, Morningstar Inc. analyst, wrote in a report on the stock offering.

First Wind generated about $88 million in revenue through the first nine months of the year, about 50 percent more than it reported for the same period of 2009. But the company also posted an operating loss of $43 million for the first three quarters, about the same amount it lost over that period last year.

read more

WSJ:  First Wind scraps IPO after price cut: CEO says terms of stock debut not attractive

WSJ Market Watch Oct. 28, 2010, 2:23 pm EDT (After IPO was cancelled)

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) -- First Wind Holdings Inc. on Thursday said it would scrap its initial public offering after the wind-farm developer cut its IPO price by 24%.

CEO Paul Gaynor said Boston-based First Wind “received significant interest” from potential investors in its IPO, but the, “terms the that the ... market was seeking at this time were not attractive to the company.”

The company remains “well-positioned to grow in its core markets” as a developer, builder, financier and operator of win projects in the Northeast, the West and Hawaii, he said. (Some people may actually believe this.)

The move comes after U.S.-listed shares of Chinese-based wind turbine maker China Ming Yang Wind Power Group Ltd. have fallen about 26% since its debut on OCt. 1 at $14 a share.

Also on the wind front, Danish turbine giant Vestas this week announced plans to lay of 3,000 workers because of slack demand in Europe.

Mike Garland, CEO of wind developer Pattern Energy Group, said the IPO from First Winds came during a challenging time in the turbine construction business.

“Most industries have head winds right now and the wind industry a bit more,” he said.

U.S. energy policy tends to change every two years, and this regulatory uncertainty has helped to dampen wind energy development in 2010, he said. (Obama bubble about to be burst by Congress)

A tax credit grant program for wind energy is set to expire at the end of the year, he said. The grant was instrumental in getting Pattern Energy’s new $250 million, 101 megawatt Hatchet Ridge Wind Farm in northern California constructed, he said.

He wasn’t surprised to hear that First Wind cut its IPO price given that the wind business “is not facing the most ideal marketplace” right now, Garland said.

read more

Oh, by the way, have you seen any of this news in ANY Hawaii newspaper?

REUTERS: Hawaii wind farm operator faces default risk

THE FUTURE: Wind Energy's Ghosts

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