Solar-Panel Parts Maker Lists in Spain as Green Momentum Builds

(Bloomberg) -- Solar-panel parts maker Soltec Power Holdings SA jump as much as 14% in Madrid’s first main market debut in two years, buoyed by Europe’s drive for a green economic recovery from the coronavirus pandemic.

Stock is trading at 5.44 euros at 12:02 p.m. in Spain, up from its initial public offering price of 4.82 euros, the top end of its original guidance.

The company, which manufactures trackers that allow solar panels to rotate, sold 30.9 million shares in the listing for proceeds of 165 million euros ($177 million), including an over-allotment option. The deal values Soltec at 440 million euros.

Soltec’s listing provides a much-needed boost for the Spanish market, which has suffered from a series of delistings and a lack of IPOs in recent years. The pandemic has ravaged its economy, while deep ideological divides have led to a precarious political situation.

Still, demand for the IPO exceeded the shares on offer multiple times, according to terms seen by Bloomberg. This allowed underwriters to price the offering at the top end of expectations, at a time when many recent floats in Europe priced their deals in the lower half of their original price ranges.

Green Boom

Based in Spain’s Murcia region, Soltec aims to use the fresh capital to cut its debt and fuel the expansion of its current business lines and the development of power projects. The company, which halted its IPO plans in March due to the pandemic, is now looking to jump on the growth momentum in the solar-power sector.

“Prior to Covid-10 the solar sector was seen as very important in the development of renewable energy and in the energy transition globally,” Sergio Lopez, Soltec’s chief operating officer, said at a solar energy conference last week. Solar power “will be a very important factor in the economic recovery.”

Global investment in new renewable capacity grew 5% in the first half of 2020, according to BloombergNEF. Utility-scale tracking photo-voltaic panels, which use the sort of equipment Soltec makes, are now the cheapest source of new electricity in Australia, South Africa, Chile and Colombia.

Solar power is expected to benefit from governments looking to use coronavirus recovery funds to both boost growth and the transition toward low-carbon economies. The European Union is toughening targets for fighting climate change, putting the Green Deal front and center of its stimulus efforts in response to the pandemic’s financial upheaval.

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