First Wind Shelves Plans For IPO

Wind farm developer First Wind Holdings has put its IPO on hold after cutting it’s price range by 24%, Reuters reported. Boston-based First Wind, which is funded by private equity firm Madison Dearborn and hedge fund operator D.E. Shaw, originally aimed to raise $300 million from the offering. The company faced skepticism from investors due to a heavy debt load, Reuters reported.

(Reuters) – Wind farm owner and operator First Wind Holdings Inc canceled its IPO after cutting its expected price range by 24 percent and facing investor skepticism about its balance sheet and wind industry financing.

The company’s struggle to come public is likely a sign of its own particular problems rather than an indication that the U.S. market for new issues has completely fallen off. Two other IPOs moved higher on their first day of dealings.

Shares of medical services provider ExamWorks Group Inc were trading up over 6 percent in their debut on the New York Stock Exchange. Shares of SeaCube Container Leasing Ltd, which leases and sells refrigerated and dry containers and generator sets, are trading up 9 percent, also on the New York Stock Exchange.

“This is a company (First Wind) that certainly has real assets and certainly has been doing some big projects, but is challenged on the debt side,” said Greg Neichin, vice president of San Francisco-based research and advisory firm Cleantech Group LLC.

“If anything, it’s a sign that you should be really thoughtful about project finance and debt loads and trying to maintain a cleaner balance sheet,” Neichin said.

First Wind finances, develops and operates utility-scale wind energy projects in the Northeastern and Western United States and Hawaii. It is the first U.S. wind energy company to attempt an IPO, according to Thomson Reuters data.

The company, which had planned to raise $300 million in its IPO but cut that figure back to $228 million on Wednesday, has been posting losses and had outstanding debt of more than half a billion dollars as of Sept 30. It had hoped to list on Nasdaq under the ticker symbol “WIND”.

Some U.S. government financing — of which First Wind has received hundreds of millions of dollars — could be suspended at the end of the year. Analysts have also warned that weak electricity prices could be too low to secure private financing.

New U.S. wind power installations were down 71 percent through the first six months of 2010, according to the American Wind Energy Association.

First Wind Chief Executive Officer Paul Gaynor said in a statement that the terms the company was able to get for the IPO were “not attractive” and the company was canceling its IPO.

Credit Suisse, Morgan Stanley, Goldman Sachs and Deutsche Bank were lead underwriters on the First Wind IPO.


Analysts are searching for signs of stability in what has proven an uncertain U.S. IPO market. Some deals are doing well while others are being canceled.

Right now the number of companies that want to raise equity capital in the United States but are waiting for the right time to issue shares has surged to its highest level since 2007, according to the quarterly Ernst & Young LLP U.S. IPO Pipeline study released on Tuesday.

At the end of the third quarter, there were 133 companies in the U.S. pipeline hoping to raise $26.4 billion, the study showed.

ExamWorks and SeaCube had some difficulty pricing but are now trading up.

ExamWorks shares opened at $16.75, about 4.7 percent above their IPO price. The shares rose as high as $17.38 on the New York Stock Exchange before giving up some of the gains to trade at $17.02.

The Atlanta-based company on Wednesday saw shares in its initial public offering price at the bottom of its expected range, raising $164.8 million. It sold 10.3 million shares for $16 each. It had planned to sell shares for $16 to $18 each.

Shares of SeaCube opened at $11, some 10 percent above their IPO price. The shares rose as high as $11.25 before retreating to $10.92 on the Big Board.

The company sold more shares than expected on Thursday but priced below the expected range, raising 25.5 percent less than anticipated. The company sold 9.5 million shares for $10 each, raising about $95 million. It had planned to sell 7.5 million shares for $16 to $18 each.

Underwriters on the ExamWorks IPO were led by Goldman Sachs, Credit Suisse and Barclays Capital. Underwriters on the SeaCube offering were led by JPMorgan, Citi, Deutsche Bank and Wells Fargo.

By Clare Baldwin and Scott Malone

(Additional reporting by Rodrigo Campos, editing by Gerald E. McCormick)