UPDATE 1-French wind farm operator Theolia in talks to refinance bond

Thu Apr 24, 2014 8:33am EDT

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PARIS, April 24 (Reuters) - French wind farm operator Theolia said it was looking at several options to refinance a convertible bond which it would be unable to cover in full at the next repayment date.

Theolia said in a statement on Thursday that if all the holders of the 126 million euros ($174.2 million) worth of outstanding convertible bonds were to ask for early repayment by Jan. 1, 2015 - which it sees as highly likely - it would not be able to pay this entire amount.

The company, which has a market capitalisation of 84 million euros, said it was working on several options including a capital increase; issuing new longer-dated debt; renegotiating the terms of its convertible bond; selling assets; or being subject to a takeover offer.

It said it was in talks with its main bondholders to find a solution that would enable it to continue as a going concern after Jan. 1 but added it could not guarantee it would be able to achieve this before the year-end deadline.

Theolia said that if it is not able to implement one or a combination of the various options, it could be forced into liquidation by the courts.

In September 2013, a 335 million euro friendly bid for Theolia by a fund held by Australia's Macquarie lapsed as it failed to get the required two-thirds of voting stock.

Theolia Chief Executive Fady Khallouf told Reuters this week that the Macquarie bid was a missed opportunity and said he hoped to find a solution before the end of July.

MARGINS

Khallouf said that despite its debt repayment problem, Theolia's operational performance had improved, with gross margins now around 53 percent, from 2.5 percent in 2010, and that it was no longer burning cash.

But the company's net loss widened to 41.2 million euros in 2013, from 34.2 million in 2012, due to asset writedowns, particularly in Italy, and high financial costs.

Its 2013 revenue jumped to 95.4 million from 67.7 million and core earnings to 50.6 million from 32.9 million, but net financial charges rose to 39.4 million euros from 32 million in 2012.

The firm's net debt nearly doubled to 424 million euros from 225 million at the end of 2012, mainly due to the consolidation of its net financial debt related to its German Breeze Two Energy project.

Theolia operates 1,221 megawatts - roughly equivalent to one nuclear power plant - for its own account and for third-parties in France, Germany, Italy and Morocco.

Since 2010, the group's business model focuses on sales of electricity rather than the more volatile windpark installation business.

Theolia shares were down nearly 4 percent at 1.25 euros on Thursday, after falling to an intraday year low of 1.18.

($1 = 0.7231 euros) (Reporting by Geert De Clercq and Benjamin Mallet; Editing by Jane Baird and Pravin Char)

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