Solairedirect sets Paris IPO price range

Solairedirect said it would more than double the amount of solar power capacity it builds annually over the next two years as the French group launched an initial public offering in Paris on Thursday.

The company said it was looking to tap into the rapid growth of the sector, with strong Asian demand expected to lead to the total globally installed to rise more than half by 2018 to 69.6 gigawatts, according to analysts at IHS.

This comes as the cost of solar panels has dropped radically over the past five years, as manufacturers in China and elsewhere in Asia have ramped up production and the price of key components have fallen.

Solar photovoltaics have dropped 75 per cent in price since the end of 2009 and, globally, the cost of electricity generated by solar PVs has fallen 50 per cent since 2010, according to analysts.

"The market is exploding because it is now competitive with other energy sources," said Julien Pourquery, Solairedirect chief financial officer, at a press conference in Paris.

The company set a price range for the initial public offering of €16 to €21.50 on Thursday, implying a market capitalisation of about €400m. Trading on Euronext Paris is expected to begin on April 30.

The company, which was founded in 2006, operates or is developing 57 solar parks and plans to expand in Latin America, Africa, the US, the Middle East and Southeast Asia as well as in France.

The group does not manufacture solar panels itself but works with producers. It is present in 15 countries and is attempting to compete with much larger US groups such as SunEdison.

The company says that it expects to build 300-325 MW worth of new capacity in the year ending March 2016, up 75 per cent from the previous year. It says that in 2017 there will be a further annual increase of 50 per cent.

Thierry Lepercq, chief executive, said that the market was moving from subsidy-driven growth to a more market-driven growth, and the company was looking to branch out of Europe.

India, which has about 3GW of solar electricity capacity, has a target of 100GW within the next eight years.

Mr Lepercq said that in Chile, where conditions are especially good, solar can generate electricity for about 20 per cent less in price than coal and about 40 per cent less than natural gas.

The company, which plans to raise about €175m from the offering, reported revenue in the six months to September 30 of €69m.

Deutsche Bank and Citigroup are acting as joint global co-ordinators and joint lead managers on the IPO. Greentech Capital Advisors is acting as financial adviser.

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