FRANKFURT/PARIS (Reuters) - French electric car battery maker Blue Solutions (BLUE.PA) set a 14.50 euro price tag on shares in its planned stock market flotation, valuing the company at 418 million euros ($575.6 million) in a move geared to raise awareness of its technology.
The company, which belongs to French billionaire Vincent Bollore’s own holding group (BOLL.PA), says the aim of the flotation of a 10 percent stake worth some 42 million euros isn’t intended to raise development cash, since this will come from the parent.
The group says it wants to draw attention to 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.
“We don’t need money, we do this to be known,” said Chief Executive Gilles Alix at an event in Frankfurt ahead of the listing, due on Wednesday. He cited a commitment from the Bollore group to financially back the company until 2016.
The issue price of Blue Solutions, whose batteries power vehicles used by the Autolib car-sharing scheme in Paris, is at the top end of the previously indicated 12 to 14.50 euro per share range.
Blue Solutions is looking to capitalize on safety concerns surrounding the 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.
Alix said the offer was fully subscribed by institutional investors but acknowledged it was not without risks given the company was still in the early stages.
“There is some chance that it will be a disaster ... but they (the investors) will lose 42 million, which is nothing for these kind of investors,” Alix said, adding it could also be very profitable for them.
The CEO said Blue Solutions 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.
To generate a current in a lithium-ion battery, an electrolyte solution normally transports charged lithium atoms back and forth across a porous membrane separating two metallic poles, such as nickel manganese cobalt and graphite. Weight, performance and safety depend on the specific materials used.
Unlike with such lithium-ion batteries, LMP batteries are solid and have no such 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.
About $2.4 billion euros of Tesla Motors’ market value was wiped out after automotive blog Jalopnik published images of its Model S sedan in flames following an accident near Seattle, Washington.
Tesla CEO Elon Musk has ascribed the fire to an object piercing the quarter-inch armor plate protecting the battery pack, adding there should be “absolutely zero doubt that it is safer to power a car with a battery” than a conventional fuel-powered vehicle.
General Motors’ (GM.N) Chevrolet Volt and Mitsubishi’s (7211.T) i-MiEV have faced similar problems in the last couple of years. Even plane maker Boeing (BA.N) has dealt with concerns over lithium-ion battery fires in its new Dreamliner aircraft.
Asked if Blue Solutions might benefit from these safety incidents, Finance Director Juliette Laquerriere said: “It doesn’t help, but it shows that technology is an issue.”
($1 = 0.7262 euros)
Additional reporting by Victoria Bryan in Frankfurt; Editing by David Holmes