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

In addition, there is a risk that product liability claims could also be filed against the Company or one of
its subsidiaries if third parties are harmed by defective products that were offered for sale by a Nordex
Group company.
Claims for damages against a Nordex Group company could have material adverse effects on the
business, financial position and results of operations of the Company, particularly when these claims
were not covered or not completely covered by the insurance policies purchased by the Company (see
‘‘Business—Insurance Policies’’). In addition, malfunctions could damage the reputation of the products
developed by the Company and therefore impair the marketability of its products.
Insurability of Risks
The Nordex Group holds insurance policies for the wind turbines it sells, which generally cover
construction, manufacturing and assembly defects for which the relevant Nordex Group company is
liable. Such insurance normally covers the first two years of operation of the wind turbines. Due to the
Nordex Group’s past high insurance claim record, there can be no assurance that the Nordex Group will
be able to obtain similar insurance coverage in the future at the same or not significantly higher cost.
Higher insurance premiums, or the inability to use insurance to cover expenses for repairing defective
products, would have a material adverse effect on the business, financial condition and results of
operations of Nordex AG, provided the Nordex Group is not able to pass on increased expenses to
customers through higher prices for wind turbines.
Governmental Regulation
Depending on location, power generation from renewable energies can be more expensive than
producing electricity from coal, natural gas, oil or nuclear fuel, so the suppliers and producers of
electricity from renewable sources are often dependent on political support—whether financial or legal
(see ‘‘Market Environment and Regulatory Background’’). Any changes in the relevant regulatory
environment could have an adverse effect on the markets served by the Nordex Group, which in turn
would have a material adverse effect on the business, financial condition and results of operations of
Nordex AG.
In the past, the decrease or elimination of governmental grants and support in a country has had a
sustained negative impact on the wind energy market share in that country. Although governmental
development programs will likely be in effect until the ratio of wind energy-produced power to total
power usage has reached a level consistent with political goals, no forecasts can be made about when
this level will be reached in each country. If government support were terminated, this could make
producing electricity from wind energy unprofitable. The opportunities for the Nordex Group to sell
wind turbines would drop sharply, which in turn would have material adverse effects on the business,
financial condition and results of operations of the Company.
There can be no assurance that the currently regulations will not be amended, specifically with respect
to minimum prices or undertakings to purchase a minimum volume of energy in accordance with the
Act on Granting Priority to Renewable Energies (EEG). This could have a material adverse effect on the
business, financial condition and results of operations of the Company.
General Legal Environment and Suitable Sites
Wind turbines emit noise, light effects (such as rotating shadows and reflected flashes of light from the
rotor blades when the sun is shining), and ice throws in winter. Wind turbines also are sometimes
regarded as detrimental to the beauty of the local environment, particularly by residents of neighboring
residential areas.
Laws and other regulatory measures govern the construction and operation of wind turbines (in terms
of allowable noise levels, distance from buildings, and permissibility of construction projects in nature
reserves). Due to these legal regulations, and the widely different wind conditions in various regions,
only a limited number of suitable sites are available for wind turbines in Germany and a number of
other countries. There can be no assurance that changes in regulations will not be made and that the
number of suitable sites will not decline further. This could lead to a decline in investment
25