Soltec, the Spanish leading manufacturer of solar trackers, has achieved resounding success in its IPO, the first in Spain since Solarpack in December 2018. Demand reached approximately €750 million, five times higher than the planned capital increase of €150 million. The issue price was set at the top of the indicative range, between €3.66 and €4.82 per share, which places the company’s initial market capitalization at €440.4 million when it debuted on the stock market on October 28.
The oversubscription was historic, significantly exceeding the reception of other recent IPOs in Spain. The order book gathered nearly 140 internationally diversified investors, including investment funds, pension funds, and institutional investors from Spain, France, Germany, the UK, and the USA. Notably, 60% of the main allocations were concentrated among long-term investors, avoiding a dominant presence of speculative funds.
Among prior commitments, Santander Asset Management and the Swedish manager Swedbank Robur guaranteed subscriptions for €30 million, conditioned on the price within the established range.
Strategy and use of funds
The capital increase and the green shoe option will allow the largest shareholder, José Moreno Riquelme, to reduce his stake from 69.3% to around 42.3%. Raúl Morales, CEO of Soltec, will see his participation reduced from 29.7% to 19.6%, while Pablo Otín, CEO of the subsidiary Powertis, will go from 1% to approximately 0.7%.
The funds raised (around €138 million net) will be used to strengthen the company’s balance sheet and fuel growth, primarily financing Powertis, which develops photovoltaic projects, and improving EBITDA to reduce indebtedness levels, lowering the net debt/EBITDA ratio from 4.26 to between 1 and 1.5 times. No funds will be used to repay existing financial debt.
Financial results and outlook
In the first half of 2020, Soltec reported revenues of €115.7 million, 5% less than the same period the previous year, with a negative EBITDA of €14.5 million and net losses of €9.3 million. In 2019, revenues reached €356.8 million, with a positive EBITDA of €15.4 million and a net profit of €1.34 million.
Soltec operates with two divisions: Soltec Industrial (tracker manufacturing) and Powertis (solar project development), complementing each other to offer added value to their clients.
The company does not plan to distribute dividends over the next three years, reserving the option to review this policy after that period based on results and outlook.
