Nordex increases capital to guarantee its liquidity
Just two weeks ago, Nordex announced a private placement with its main Spanish shareholder, Acciona, to generate some €140 million gross. The news was poorly received in the financial market. In premarket trading on the Tradegate platform, Nordex shares lost around 7% compared to Xetra's previous closing price. In its search for fresh money from investors, the Rostock-based wind turbine manufacturer is now announcing a capital increase for a gross amount of €212 million, which it will pay into the register through a share issue with subscription rights . According to the announcement published Sunday night in Hamburg, the subscription price for the new shares has been set at 5.90 euros.
On Friday, Nordex shares closed Xetra's main trading at €8.90. Nordex shareholders could purchase 10 new shares for every 49 existing shares at the subscription price. Acciona will exercise the subscription rights of its current participation in the share capital of 39.66%. The shares for which subscription rights are not exercised will be fully subscribed by a banking consortium. The reference period runs from July 13 to 26. By virtue of the increase, the share capital of Nordex will amount to a total of 211,946,227 euros.
Wind turbine industry expert Constantin Hesse, an analyst at Jefferies, maintains his €16 price target, despite the recent price drop, and continues to recommend the stock as a buy. The second capital raise in just a fortnight inspires less confidence that the company can hit the upper end of its 2022 target range. However, the importance of cash holdings in the wind energy industry is particularly important, so the analyst remains optimistic about the company's prospects, especially in Europe. The large US bank Citigroup, for its part, lowered the target price of the share from 10 to 9 euros.
According to Nordex, the capital increase with subscription rights is intended to strengthen its capital structure by increasing the proportion of equity. The increased liquidity will protect the company against short-term industry-specific risks in the current volatile market environment for the wind energy sector, according to a statement from the firm.
Nordex started the new year with heavy losses. Presenting the figures, the company cited costs for the realignment of rotor blade production, lower facility throughput, and increased raw material and logistics costs as reasons. Other wind turbine manufacturers, such as Vestas and Siemens Gamesa, were also cautious about the current year at the time, due to rising costs and supply chain disruptions, but as of February 24, the date of the beginning of the Russian invasion of Ukraine, all prospects were blown up.
Nordex additionally postponed the presentation of its quarterly results until mid-June due to a cybersecurity incident and was banned from the S-Dax small-cap index due to the late announcement. The company intends to publish its figures for the first half of the year on August 11.
In any case, in the month of May it revised its forecasts downwards, after identifying a negative impact of the war of around 200 million euros in sales in 2022. Thus, compared to the range of between 5,400 and 6,000 million euros in sales forecast at the beginning of the year, the company limited its prospects to an estimate of between 5.2 and 5.7 billion euros for this year. "Due to these unexpected upheavals, 2022 will be much more difficult than we initially expected", recognized the CEO José Luis Blanco, "the impact of the war in Ukraine and the blockades in China are affecting the wind industry and weigh on the development of our sales and margins.
In the long term, however, there is no doubt that the gas crisis in the European energy market will provide an additional boost for renewable energies and, in particular, for wind turbines, with increasingly ambitious goals by governments and an acceleration of the demand for wind energy in the medium term.
