OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
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condition, results <strong>of</strong> operations and continued existence <strong>of</strong> the Company. The success <strong>of</strong> these<br />
acquisitions and participations, and the improvement <strong>of</strong> the Company’s market position, depends, in<br />
part, on the integration in<strong>to</strong> the <strong>Nordex</strong> Gro<strong>up</strong> <strong>of</strong> acquired companies. Even if the Company<br />
investigates the financial and legal risks associated with target companies <strong>to</strong> be acquired, agrees price<br />
adjustment clauses and receives adequate warranties from the sellers, there can be no assurance that<br />
future occurrences would not result in specific acquisitions or equity interests losing their value<br />
considerably or entirely. Such consequences could have material adverse effects on the business,<br />
financial condition and results <strong>of</strong> operations <strong>of</strong> the <strong>Nordex</strong> Gro<strong>up</strong>.<br />
Risk <strong>of</strong> Entry in<strong>to</strong> New Markets<br />
In the fiscal year 1999/2000, the <strong>Nordex</strong> Gro<strong>up</strong> generated approximately 44% <strong>of</strong> its revenue outside<br />
Germany; the majority <strong>of</strong> this share was generated in Denmark, Egypt, the United States, China, Spain<br />
and Portugal. The limited number <strong>of</strong> wind turbine facilities available in Germany requires the Company<br />
<strong>to</strong> expand its business activities within and outside <strong>of</strong> Europe and <strong>to</strong> consider forming foreign<br />
subsidiaries and sales alliances. As the Company develops its global operations, it faces numerous<br />
challenges, including the burden and expense <strong>of</strong> complying with a wide variety <strong>of</strong> foreign laws and<br />
regula<strong>to</strong>ry requirements, potentially adverse tax consequences, tariffs and other trade barriers,<br />
difficulties in staffing and managing foreign operations, cultural and language differences, fluctuations<br />
in currency exchange rates, increasingly complex legal product requirements and related liability issues.<br />
If the Company does not appropriately anticipate changes and continue <strong>to</strong> adapt its practices <strong>to</strong> meet<br />
these challenges, its growth could be impeded. If the Company’s entry in<strong>to</strong> new markets were delayed<br />
or even unsuccessful, this could materially adversely affect the business, financial condition and results<br />
<strong>of</strong> operations <strong>of</strong> the Company.<br />
Dependence on Senior Executives<br />
The financial success <strong>of</strong> the <strong>Nordex</strong> Gro<strong>up</strong> is largely attributable <strong>to</strong> the efforts <strong>of</strong> the managing<br />
direc<strong>to</strong>rs <strong>of</strong> <strong>Nordex</strong> AG’s subsidiaries and the leadership <strong>of</strong> senior executives employed by Borsig<br />
Energy GmbH. The future financial success <strong>of</strong> the <strong>Nordex</strong> Gro<strong>up</strong> depends on highly qualified managers<br />
continuing <strong>to</strong> work for the <strong>Nordex</strong> Gro<strong>up</strong> and furthering its interests in the long term. If such managers<br />
were <strong>to</strong> leave the Gro<strong>up</strong>, this could have a material adverse affect on the Gro<strong>up</strong>’s business, financial<br />
condition and results <strong>of</strong> operation <strong>of</strong> the Gro<strong>up</strong>.<br />
Recruiting and Employees<br />
The successful attainment <strong>of</strong> the <strong>Nordex</strong> Gro<strong>up</strong>’s corporate goals is heavily dependent on its ability <strong>to</strong><br />
recruit, retain and train highly qualified employees, particularly in the areas <strong>of</strong> mechanical engineering,<br />
electrical engineering and ro<strong>to</strong>r blade development. Extremely important for <strong>Nordex</strong>’s continued<br />
success are employees who, in addition <strong>to</strong> training in the above-mentioned areas, have experience in<br />
designing and developing wind turbines. Suitable marketing and sales employees, who should generally<br />
have a technical background and knowledge <strong>of</strong> the particulars <strong>of</strong> wind turbine construction, are equally<br />
in demand. There is a risk that due <strong>to</strong> overall growth, particularly <strong>of</strong> the market for wind turbines, and<br />
the resulting demand for suitably trained pr<strong>of</strong>essionals, retaining an insufficient number <strong>of</strong> qualified<br />
employees could become a barrier <strong>to</strong> growth for the <strong>Nordex</strong> Gro<strong>up</strong> and prevent it from reaching its<br />
goals. This could materially adversely affect the business, financial condition and results <strong>of</strong> operations<br />
<strong>of</strong> the Gro<strong>up</strong>.<br />
Research and Development<br />
The <strong>Nordex</strong> Gro<strong>up</strong> invests substantial resources in the development <strong>of</strong> its products. However, the Gro<strong>up</strong><br />
does not undertake its own research activities. The Gro<strong>up</strong> is further developing the mechanical and<br />
electronic components <strong>of</strong> its wind turbines, in order <strong>to</strong> reduce the costs <strong>of</strong> producing electricity by<br />
building larger, more powerful and thus more efficient turbines (see ‘‘Business—Research and<br />
Development’’). Specifically, the Gro<strong>up</strong> plans <strong>to</strong> make significant investments in the coming fiscal years<br />
in the development <strong>of</strong> a five megawatt <strong>of</strong>fshore wind turbine. There can be no assurance that new<br />
products and the further development <strong>of</strong> existing wind turbines will be technically successful, will not<br />
experience delays, will not incur higher costs than originally expected, or will succeed on the market.<br />
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