OFFERING MEMORANDUM Global Offering of up to ... - Nordex

Legal Risks
Litigation Risk
Various Nordex Group companies are currently involved in a number of legal disputes, either pending
or threatened, with a variety of customers or suppliers, including: Aerpac Aerodynamics-Product and
Consultancy B.V.; ITA S.A., through a former subsidiary of Nordex Energy GmbH, Ekter Aioliki S.A.;
Energiekontor Windkraft GmbH; BOREAS Energie GmbH; Wehrle Werk AG; and Atlas Energieanlagen
GmbH and Gothaer Versicherungsbank VVAG, seeking recourse on guarantees or asserting claims for
damages. The conflict with ITA S.A. was resolved in an out-of-court settlement, following which the
pending lawsuits were withdrawn. (see ‘‘Business—Litigation’’).
The outcome of these disputes is unclear. No forecast can be made as to whether the threatened
litigation can be settled out of court and whether damages will be incurred. The Company or the
relevant Nordex Group companies could be found liable or required to pay considerable damages as a
result of out-of-court negotiations in an amount exceeding provisions, or to pay substantial costs for
the repair of defective wind turbines or wind turbine components. In addition, the Company may have
to pay its own and the other party’s legal costs.
The Company’s majority shareholder, Borsig Energy GmbH, has indemnified the Company from
obligations to third parties arising from disputes currently known to it with respect to Aerpac
Aerodynamic Products and Consultancy B.V., including the necessary costs of the retrofit program
developed for this purpose up to an agreed maximum of DM 20 million (plus the costs of the retrofit
program). The indemnity also covers claims asserted by the Danish buyer of Ekter Aioliki S.A., due to its
dispute with ITA S.A. and the Companies contractually related to ITA S.A. respectively, and from
disputes with Wehrle Werk AG, Energiekontor Windkraft GmbH, BOREAS Energie GmbH and Atlas
Energieanlagen GmbH & Co. KG Windpark Neuruppin.
Obligations to pay damages and repair turbines could have a material adverse effect on the Company’s
reputation, and therefore indirectly or directly, for example in the event that the maximum amount of
the indemnity is exceeded, have an adverse effect on the business, financial condition and results of
operations of the Company.
No predictions can be made about the outcome of disputes in which the Nordex Group is suing third
parties on warranties or asserting claims for damages (see ‘‘Business—Litigation’’). If the Group
companies’ claims are unsuccessful, the considerable expenses already paid for repairs to wind turbines
would not be recovered. In addition, it is possible that the court costs incurred would have to be borne
by Nordex Group companies. This could have material adverse effects on the business, financial
condition and results of operations of the Company.
Product Defect Risk, Product Liability
The Nordex Group generally gives its customers warranties on its wind turbines, covering capacity
range, maximum noise level and servicing of delivered wind turbines. Compliance with capacity range
and noise level are demonstrated when wind turbines are delivered, and Nordex provides servicing for a
period of two to five years from the time the turbine is delivered.
There is a risk that the wind turbines developed, manufactured and sold by the Nordex Group could be
defective. Although the wind turbines are tested comprehensively before delivery and ongoing
production is subject to quality assurance measures, there can be no assurance that defects will not
arise during the operation of wind turbines that would entitle the respective wind turbine operators to
seek compensation based on warranties. The Nordex Group carries warranty insurance on its machines,
generally for the duration of the warranty for the wind turbines delivered. The insurance policies cover
claims by customers arising from warranties. If the problem is caused by a defective component from
an outside supplier, Nordex can seek compensation from the relevant supplier (see ‘‘—Risks Related to
the Company—Technical Risks and Technologies Utilized’’). However, if no claim can be asserted against
a supplier, and the defect affects a large number of the relevant product or products from various wind
turbine series, claims by customers based on warranties could have a material adverse effect on the
business, financial condition and results of operations of the Nordex Group.
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