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$737 Million IPO Planned for Germany's Schott Solar, Despite Market Woes

August 25, 2008
Source: New Energy Finance

Privately held German glass manufacturer Schott is planning a $737 million initial public offering of its integrated PV unit to expand research and boost production.

Well informed sources confirmed for New Energy Finance the content of a Thursday article in German financial daily Frankfurter Allgemeine Zeitung that quoted Schott Solar CEO Martin Heming as saying his company's IPO would occur 'in the near future'.

According to the newspaper, lead arrangers for the deal are Germany's Deutsche Bank and Commerzbank and US investment bank JP Morgan, with Germany's Landesbank Baden-Wuerttemberg joining in the consortium.

Schott plans to maintain a majority stake in the new company, and Heming will be chairman.

No further details on timing or the planned stock exchange were provided in the article, and an official at Schott said legal restrictions prevented him from commenting.

Though Germany's stock market is in the doldrums -- with the benchmark Deutscher Aktien Index (DAX) languishing at 6,269.82 on Thursday, 22.4% off its 12-month high -- Schott appears confident that high demand for solar energy will ensure a successful float.

Some justification for optimism does exist. Share prices in Niestetal, Germany-based PV inverter maker SMA Technologie have risen some 40% since the company's launch in late June on the Frankfurt Stock Exchange.

And New Energy Finance data show that solar companies raised nearly $2 billion in new equity on the global public markets in Q2, though only a small portion was derived from IPOs.

Also, investors may be given confidence by German engineering giant Robert Bosch's purchase in June of a majority stake in PV maker ErSol, which has a similar position along the photovoltaics value chain to Schott Solar. Bosch was so sure of its acquisition that it paid a 63% premium to ErSol's trading price. (Bosch has acquired just over 91% of the company through shares and options.)

Against that backdrop, Schott Solar is taking proactive steps to ramp up production. In recent days, it announced a business realignment that it said will enable it to more than double solar cell production capacity at its Alzenau plant by late 2011.