Friday the Oakland, Calif. company filed a plan to sell as much as $250 million of common stock in an initial public offering, a week after closing on a $1.6 billion U.S. Department of Energy loan guarantee for the Ivanpah project. Two weeks earlier they closed on $200 million in equity, bringing their total equity financing to more than $530 million.
Not bad for a company that has yet to complete a commercial project.
Will the public market show BrightSource the same kind of love as its private investors — which include Google, Morgan Stanley, NRG Energy, Vantage Point Venture Partners, Draper Fisher Jurvetson, subsidiaries of BP and Chevron, and Alsom Power Inc.?
The IPO market for cleantech companies has been rocky in the past few years, and very well may not take kindly to a company that has $1.8 billion in contractual obligations and debt and it’s first project under construction, using new technologies.
Just ask First Wind Holdings. First Wind was ready to become the first wind developer to have a public offering back in 2008, when wind was a hot commodity. After a few fits and starts, they were ready to go in the fall of 2010, but by then the U.S. Congress had failed to pass any climate legislation, and the natural gas revolution had roiled power prices, which hit the renewable sector hard. By 2010 wind developers in particular were finding it harder to put together deals.
First Wind’s ambitious IPO, initially hoped to raise as much as $450 million, but got whittled down to around $200 million because of lackluster investor interest. It was ultimately pulled within days of launching. This was for a company that had seven utility scale wind farms at the time.
First Wind CEO Paul Gaynor told the Boston Business Journal in January that they would instead seek to raise $300 million in private equity instead.
“The private strategic sources of capital are a lot less nervous than the public markets,” said Gaynor. The weak market for public offerings in the clean energy sector is expected to last through 2012.
The fraught nature of the public market for renewables makes the importance of private investors even greater. Luckily for BrightSource, if it can’t get a share price it likes in the public marketplace it has some deep-pocket partners, like Alstom, a French multinational corporation, with $130 million committed to BrightSource, and a partnership agreement for selling solar thermal power systems, to help it through.