Sky Solar Holdings, an independent power producer with solar assets mainly in Greece and Japan, announced terms for its IPO on Wednesday. The Hong Kong-based company plans to raise $138 million by offering 12.5 million shares at a price range of $10 to $12. At the midpoint of the proposed range, Sky Solar Holdings would command a market value of $604 million.
Business
Sky Solar operates solar parks producing 52 MW of electricity in Greece (44% capacity), Japan (36%), the Czech Republic (11%) and Bulgaria (7%). Most of its power purchase agreements fix the price of electricity for 20 years or more. The company has identified potential solar projects with capacity of about 1.2 GW in countries such as Chile, Uruguay, Japan, Canada and South Africa. This pipeline of projects consists of 5 MW under construction, 280 MW shovel-ready and 850 MW in earlier stage development. Sky Solar originally constructed and sold solar parks but in 2013 it altered its business and began selling electricity from company-owned parks.
Solar power IPOs
Another solar energy company, Vivant Solar (VSLR), raised $330 million in an IPO on September 30 and is down 18% from its offer price. Solar power spinoff and yieldco Abengoa Yield (ABY) IPO'd in June and trades 10% above its offer price. Unlike Abengoa, Sky Solar does not plan to issue dividends.
Financial performance
Revenue dropped 39% to $14 million for the six months ended June 30, 2014 as the company further shifted to electricity production (82% of revenue, up from 10%) rather than the sale of solar projects (8%, down from 79%). The company's gross profit increased to 43% from 15% under its new model. Sky Solar's adjusted EBITDA was $800,000, up from a $12 million loss in the prior period.
The Hong Kong-based company, which was founded in 2009 and booked $27 million in sales for the 12 months ended June 30, 2014, plans to list on the NASDAQ under the symbol SKYS. Sky Solar initially filed confidentially on April 15, 2014. FBR Capital Markets and Cowen & Company are the joint bookrunners on the deal. It is expected to price during the week of November 3, 2014.
