OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
OFFERING MEMORANDUM Global Offering of up to ... - Nordex
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
opportunities for wind turbine and wind farm opera<strong>to</strong>rs, which could adversely affect the sale <strong>of</strong> wind<br />
turbines and the business, financial condition and results <strong>of</strong> operations <strong>of</strong> the Company.<br />
The EU directive amending the directive on the assessment <strong>of</strong> the effects <strong>of</strong> certain public and private<br />
projects on the environment (Directive 97/11/EC <strong>of</strong> March 3, 1997) will strengthen, and has intensified<br />
in those states where the directive has been converted in<strong>to</strong> national law, the regula<strong>to</strong>ry framework for<br />
the erection <strong>of</strong> wind farms. It requires that the member states <strong>of</strong> the European Union either introduce a<br />
case by case assessment which decides whether the assessment <strong>of</strong> the effects on the environment is<br />
necessary or, at their discretion, determine criteria or thresholds <strong>up</strong>on fulfilment <strong>of</strong> which an<br />
assessment <strong>of</strong> environmental compliance is required prior <strong>to</strong> the erection <strong>of</strong> a wind farm. On the basis<br />
<strong>of</strong> this directive the Federal Republic <strong>of</strong> Germany plans <strong>to</strong> introduce a regulation within this year which<br />
will provide for a preliminary examination prior <strong>to</strong> the erection <strong>of</strong> a wind farm with three or more wind<br />
turbines <strong>to</strong> ascertain whether this could have a negative impact on the environment. Among the<br />
criteria <strong>of</strong> this regulation, the legisla<strong>to</strong>r plans <strong>to</strong> distinguish between wind farms with three <strong>to</strong> five and<br />
wind farms with six or more wind turbines. If the proposed wind farm is found likely <strong>to</strong> have a material<br />
impact on the environment, an assessment <strong>of</strong> the effects on the environment will be prepared,<br />
generally taking <strong>up</strong> <strong>to</strong> several months. It cannot be excluded that the introduction <strong>of</strong> this regulation<br />
could lead <strong>to</strong> delays or even render impractical currently planned wind power projects.<br />
Infringement <strong>of</strong> Third-party Rights<br />
There is the risk that the <strong>Nordex</strong> Gro<strong>up</strong> could be involved in legal disputes based on alleged<br />
infringement <strong>of</strong> intellectual property rights claimed by third parties. Claims asserted by third parties<br />
and the resulting legal proceedings could, if successful, result in substantial claims for damages against<br />
the Gro<strong>up</strong>. <strong>Nordex</strong> does not have insurance <strong>to</strong> cover any such claims. Legal disputes with third parties<br />
concerning patents or other intellectual property rights could also result in the <strong>Nordex</strong> Gro<strong>up</strong> being<br />
required <strong>to</strong> limit or halt the manufacture, sale or use <strong>of</strong> products in which <strong>Nordex</strong> utilizes the infringed<br />
or allegedly infringed third-party intellectual property right. If the <strong>Nordex</strong> Gro<strong>up</strong> were affected by such<br />
disputes, this could have a material adverse effect on its business, financial condition and results <strong>of</strong><br />
operations.<br />
Due <strong>to</strong> a patent application filed by a US-based competi<strong>to</strong>r for variable-speed wind turbines, the<br />
<strong>Nordex</strong> Gro<strong>up</strong> is currently unable <strong>to</strong> sell a portion <strong>of</strong> the wind turbines it produces in the United States.<br />
However, the Company believes that the Gro<strong>up</strong> can still penetrate this market, because it can market<br />
and sell wind turbines in the United States that are not affected by this limitation. In addition, the<br />
Company believes that it could sell the affected turbines in the United States without infringing <strong>up</strong>on<br />
another company’s patent by making certain technical adaptations <strong>to</strong> these turbines which could be<br />
possible with a reasonable amount <strong>of</strong> effort.<br />
Risks in Connection with the <strong>Offering</strong><br />
Influence <strong>of</strong> Selling Shareholders, Sale <strong>of</strong> Shares<br />
After the capital increase and placement <strong>of</strong> the shares in the course <strong>of</strong> the <strong>Offering</strong>, Borsig Energy<br />
GmbH and Nordvest A/S will <strong>to</strong>gether hold <strong>up</strong> <strong>to</strong> approximately 40% <strong>of</strong> <strong>Nordex</strong> AG’s share capital if the<br />
Over-allotment Option is not exercised.<br />
Borsig Energy GmbH and Nordvest A/S will, therefore, still be able <strong>to</strong> exert substantial influence on the<br />
Company. Borsig Energy GmbH and Nordvest A/S, especially operating <strong>to</strong>gether, are in a position,<br />
depending on the attendance at future General Shareholders’ Meetings <strong>of</strong> the Company, <strong>to</strong> strongly<br />
influence the outcome <strong>of</strong> decisions governed by the German Public Companies Act, independent <strong>of</strong> the<br />
votes <strong>of</strong> other shareholders. These decisions include matters such as the resolution on the utilization <strong>of</strong><br />
net pr<strong>of</strong>its, the election and removal <strong>of</strong> S<strong>up</strong>ervisory Board members, the appointment <strong>of</strong> an audi<strong>to</strong>r,<br />
and corporate actions and changes <strong>to</strong> the Articles <strong>of</strong> Association. This could materially adversely affect<br />
the Company’s business, financial condition and results <strong>of</strong> operations.<br />
Two <strong>of</strong> the six members <strong>of</strong> the Company’s S<strong>up</strong>ervisory Board are presently nominated by the Babcock<br />
Borsig Gro<strong>up</strong> and one <strong>of</strong> the six by Nordvest A/S, which is controlled by the Pedersen family. Borsig<br />
Energy GmbH and Nordvest A/S have agreed <strong>to</strong> exercise their rights in the Company’s General<br />
26