Mainstream aims for €1bn float in Asia
O'Connor's fast-growing green energy firm could make dozens of investors millionaires
Published 04/09/2011 | 05:00
Mainstream Renewable Power, the fast-growing green energy firm founded by Eddie O'Connor, is targeting a valuation of €1bn when it floats on Hong Kong markets at the end of 2013 or early 2014," he told the Sunday Independent. However, a listing on the Irish stock market is "unlikely".
Mainstream, which is developing wind energy and solar power projects in Chile, South Africa, North America, Ireland and the North Sea, is on target to be profitable by the end of next year.
The Sandyford, Co Dublin- headquartered company will make another fortune for the former Bord Gais boss who owns around 55 per cent of the company. Mr O'Connor sold Airtricity to Scottish and Southern Energy for €1.9bn back in 2008. Along with Airtricity's finance chief, he invested most of his estimated €50m windfall into setting up Mainstream Renewable.
Barclays stumped up €20m for a 14.6 per cent stake in the company. Board members and staff also invested around €20m at the start-up phase.
Mr O'Connor told the Sunday Independent that staff own between 5 and 10 per cent of Mainstream Renewable. Company documents show that former Anglo Irish Bank director Fintan Drury --once chairman of Mainstream -- holds about 0.5 per cent of the company, with former Bord na Mona chairman and onetime Labour Party TD Brendan Halligan another big shareholder.
The planned flotation will also create dozens of other millionaires, with private investors owning close to 27 per cent in the firm which has raised €168m from Irish backers since it was set up. NCB private clients have been major investors in the company. The 400 shareholders are investors who made money from the sale of Airtricity, according to Mr O' Connor.
Current shareholdings will be diluted somewhat as Mainstream Renewable is in the process of raising another €60m from investors. "We may raise more than that," said Mr O'Connor. The new funding will go towards progressing Mainstream's projects around the world. The company is also seeking to roll over a debt instrument.
With profitability pencilled in for 2012, Mr O'Connor feels that the new funding may be enough to take Mainstream all the way to IPO.
A "grey market" for Mainstream Renewable shares is likely to be set up before the IPO to allow investors to trade their shares in the company, he added. The current round of fundraising sees equity being offered at about €6 per share. Based on the share issue price, Mainstream is currently valued at about €400m -- although this is forecast to rise sharply if more projects come on line. This represents a massive growth curve for the company.
In January last year, Mainstream raised €30m at €4.50 per share, putting a value of about €195m on the company. Mr O'Connor's 55 per cent stake is now worth a cool €110m, a phenomenal return on his investment.
Mainstream Renewable recently decided to re-enter the Irish wind energy market having pulled out of investing here three years ago because of the cause and difficulty in progressing projects. The company inked a major deal with Chinese turbine manufacturer Sinovel to build €1.5bn worth of wind farms in the west.
Sunday Indo Business