By Geert De Clercq
PARIS (Reuters) - French solar company Neoen is targeting a market capitalisation of 1.4-1.5 billion euros ($1.6-$1.7 billion) (1.3 billion pounds) in an initial public offering (IPO) to fund its international expansion.
The IPO will make Neoen one of the few pure-play listed renewable energy operators in Europe, along with Portugal's EDPR (LS:EDPR), Denmark's Orsted (CO:ORSTED), Norway's Scatec Solar (OL:SSOL) and France's Voltalia (PA:VLTSA).
Neoen, the largest independent French renewable energy firm competing with market leaders EDF (PA:EDF) and Engie (PA:ENGIE), will raise 450 million euros of new capital while two fund shareholders will sell existing shares worth 190 million euros, for a total offer of 640 million euros worth of shares.
Neoen chief executive Xavier Barbaro said the new cash would be used to finance renewable energy development projects in the next two to three years, but not for acquisitions.
"An IPO is a good tool to accelerate our growth but we do not depend on it for financing," Barbaro told reporters.
The new shares will be priced at 16 to 19 euros per share and the offer will run from Oct. 4-15. The price will be fixed on Oct. 16 and formal trading will start on Oct. 19, with a free float of an estimated 30 percent of Neoen stock.
Majority shareholder Impala will buy about 170 million euros worth of shares in order to retain a majority stake, but if demand is high, current shareholders including Impala and Bpifrance may offer additional shares that could boost the total offer to 711.5 million euros.
Barbaro said Impala, which earlier this year sold its minority stake in listed power retailer Direct Energie to Total (PA:TOTF), had no intention of selling Neoen.
"We are totally the kind of beauty that would attract big utilities or oil firms who want to go into renewables... but the choice to remain independent is clear and is assumed by our lead shareholder," Barbaro said.
Neoen has installed capacity of 2,000 megawatts (MW), two thirds solar, one third in wind.
"Our future is in solar, that is where costs are dropping most rapidly," Barbaro said.
Neoen has another 1,000 MW under development and will invest 2.9 billion euros - funded by project-related debt - to reach capacity of 5,000 MW installed or under construction by 2021.
Unlike many renewable energy developers, Neoen keeps full ownership of its projects and earns money by selling power to countries, utilities and companies through long-term contracts.
Barbaro said Neoen will continue to focus on OECD countries where it can sign deals in euros and dollars, preferably smaller countries where it can be market leader.
It currently has about 1,000 MW installed in Australia, 700 MW in Europe and Africa and 200 MW in the Americas, including Mexico, Jamaica and Argentina.
Last year, Neoen partnered with Tesla (O:TSLA) to install the world's biggest battery in Australia.
($1 = 0.8693 euros)