EverQ, Solar IPO Candidate, Needs Over EU500 Million

By Joseph Heaven

Aug. 25 (Bloomberg) -- EverQ GmbH, the German solar cell maker that's planning an initial public offering, needs more than 500 million euros ($736 million) to finance its expansion plan, Chief Executive Officer Ted Scheidegger said in an interview.

EverQ, whose shareholders include Renewable Energy Corp. and Q-Cells AG, will decide on the share sale's arrangers in ``the next couple of weeks,'' Scheidegger, 50, said. It aims to complete the sale, followed by a Frankfurt listing, by the first quarter of 2009 and may top up the proceeds with debt, he said.

EverQ, using manufacturing technology from Evergreen Solar Inc., has production capacity of 100 megawatt peak, a measure of the optimal power output of solar cells produced in a year under standardized conditions. It's installing equipment this month in a third factory that will raise EverQ's capacity to 180 megawatt peak. EverQ, based in the German town of Bitterfeld-Wolfen, wants to expand its capacity to 600 megawatt peak by 2012.

``On the path to 600 megawatt peak we will be looking at well in excess of half a billion euros investment,'' Scheidegger said at the company's headquarters. ``The next step is to raise the funds for the next 200 megawatt peak.''

Hovik, Norway-based Renewable Energy, Q-Cells of Thalheim, Germany and U.S.-based Evergreen Solar each owns a third of EverQ. Renewable Energy, the largest maker of polysilicon for solar panels, supplies the purified silicon to be melted and drawn into ribbons. Q-Cells advises on the cells' handling and treatment to maximize electrical efficiency.

New Shares

``This capital increase will be new shares,'' Scheidegger said. ``Including what we can leverage off our balance sheet, our requirements will be several hundred million euros'' for a fourth factory, new technology, sales and marketing staff as well as new corporate rebranding, he said.

Existing investors may also sell their holdings, he added.

Revenue will rise to about 200 million euros this year, 44 percent more than last year's 139 million euros, Scheidegger said. Earnings before interest and taxes as a percentage of sales is in the ``low double-digit'' range, with net income as a percentage of sales a ``high single-digit,'' the executive added.

``This is much, much faster, more dynamic, higher growth rate,'' said the Swiss-Canadian, who led tropical forestry company Precious Woods Holding AG's listing on the Zurich stock exchange in 2002. ``The business itself it not as complex as Precious Woods.''

`String-Ribbon'

The third plant, called EverQ3, will begin large-scale production starting in March, the CEO said. Investments in the 80 megawatt peak factory cost 150 million euros, he said.

Marlboro, Massachusetts-based Evergreen Solar is the license holder of the manufacturing technique, called ``string-ribbon,'' which uses the surface tension of molten silicon between metal wires to draw ribbons for cells of the correct thickness. This technique is cheaper than conventional production because it uses less energy and less silicon than rival polycrystalline, according to EverQ.

Renewable Energy lost 4 kroner, or 2.3 percent, to 167 kroner at 12:16 p.m. in Oslo trading. Q-Cells dropped 74 cents, or 1.1 percent, to 67.11 euros in Frankfurt.

To contact the reporter on this story: Joseph Heaven in Zurich at jheaven1@bloomberg.net