October 30, 2013 / 12:41 PM / 4 years ago

Blue Solutions shares jump in stock market debut

PARIS (Reuters) - Blue Solutions (BLUE.PA) shares rose nearly 30 percent above the issue price in their debut in an initial public offering that was more than 15 times oversubscribed, indicating strong investor interest in the French electric car battery maker.

Blue Solutions set a 14.50 euro price tag for the stock, at the top end of a 12-14.50 euro range. It traded at 18.39 euros by 1215 GMT on Wednesday, for a market value of 530 million euros ($730 million). The stock touched a high of 18.64 euros.

“The total success (of the IPO) ...shows the climate has become very favorable on the stock market,” IG France Deputy Managing Director Arnaud Poutier wrote, adding that the stock carried “major risks” but that “The appetite for risk is there.”

Blue Solutions, which belongs to French billionaire Vincent Bollore’s own holding group (BOLL.PA), has said it is floating the 10 percent stake to raise awareness more than cash.

The group wants to spark interest in its proprietary lithium-metal-polymer (LMP) battery, which it has protected with over 400 patents and which it touts as an important step forward in electric propulsion.

Bollore group, meanwhile, has committed to financially back the company, whose batteries power vehicles used by the Autolib car-sharing scheme in Paris, until 2016. Bollore shares were trading 0.7 percent higher on Wednesday.

Vincent Bollore said at a ceremony in the offices of stock exchange operator NYSE Euronext in Paris that the strong rise in Blue Solutions shares on their first trading day was both an honor and “very troubling” as it raised the pressure to deliver.

“Blue Solutions is really a very high-tech business,” Bollore said. “And like all very high-tech businesses, you have to know it offers extraordinary potential but also risks that are just as extraordinarily significant.”

Blue Solutions had no plans to list extra shares for now.

“We wish to keep the main part of this business in Bollore group’s hands,” he said.

    Blue Solutions has said it has the capacity to produce 10,000 LMP batteries but only expects to make a tenth of that total this year, rising to approximately 6,000 in 2017.

    Since it will not be covering its fixed costs, the group forecasts a loss of about 17 million euros before interest, tax, depreciation and amortization on revenue of 42 million in 2013. It aims to break even in the second half of next year.

    Blue Solutions is looking to capitalize on safety concerns surrounding more common lithium-ion batteries, which are found in Tesla Motors’ (TSLA.O) Model S and the upcoming Mercedes-Benz (DAIGn.DE) B-Class electric car.

    Unlike with lithium-ion batteries, LMP batteries are solid and have no electrolytes that can leak and potentially trigger a fire - one of the foremost risks associated with battery-powered cars, since lithium can react violently when exposed to water.

    ($1 = 0.7262 euros)

    Reporting by Matthieu Protard; Additional reporting by Alexandre Boksenbaum-Granier; Writing by James Regan; Editing by David Cowell

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