First Wind seeks $300M in private funding

Editors note: Next announcement from First Wind is that they are selling the Brooklyn Bridge.

First Wind Holdings Inc. expects to raise more money through private financing than it could have through an initial public offering, which the Boston-based wind farm developer abandoned in October.

Company CEO Paul Gaynor said in an interview that the firm expects to complete private financing in the range of $300 million in the first half of 2011, which will allow the company to develop wind projects into 2013. The company expects the funding to come from strategic investors who have financed wind power projects outside of the Northeast and want to expand into the region, Gaynor said.

“It was more prudent for us to stay private given the other private options that we have,” he said. “The private strategic sources of capital are a lot less nervous than the public markets.”

First Wind had expected to price its IPO in late October at up to $312 million, with shares in the range of $24 to $26. Proceeds would have been used to pay off a high-interest loan and as equity for new projects.

But midway through the week during which the IPO was expecting to price, First Wind cut the range down to $18 to $20, which would have raised up to $240 million.

In the end, Gaynor said, “we could've done a deal,” but the company would have only been able to pull in about $200 million from investors.

“The decision was, do you do (the IPO), take two-thirds of your money and go try to build two-thirds of your business plan,” he said. “Or do you say, ‘I’m going to stay private and try to raise from other sources of capital.’”

Though the IPO market overall has been weak, the public markets have been especially skittish about wind power companies after some major European wind companies have seen their shares fall by 50 percent or more, Gaynor said. Investors who’d lost money on European wind firms told First Wind, “I just don’t want to make that same mistake again,” he said. “That’s kind of what came through in the pricing.”

First Wind, which first filed its intentions to pursue an IPO in 2008, will consider trying again in another two years or so, Gaynor said.

First Wind has developed wind projects that are operational in Maine, New York, Hawaii and Utah and is in the process of developing a project in Vermont. The company said in a filing that it operated seven projects, with a combined capacity of 504 megawatts, as of Sept. 30. First Wind said it had four projects under construction, totaling 232 megawatts.