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Published: Thursday, 11/9/2006

First Solar to offer public stock, possibly Monday

BY JON CHAVEZ
BLADE BUSINESS WRITER
The Perrysburg Township plant is the only one now making panels, in a process that uses fewer materials than competitors'. The Perrysburg Township plant is the only one now making panels, in a process that uses fewer materials than competitors'.
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It's been decades in the making and saddled with millions of dollars in losses, but Toledo-born First Solar Inc. plans to offer stock to the public, possibly as early as Monday.

The company, whose sole manufacturing plant making solar panels is in Perrysburg Township, expects to offer 17.5 million shares to be traded under the symbol FSLR on the Nasdaq market.

Its filings with the U.S. Securities and Exchange Commission said it expects the shares in the inital public offering to be priced at $17 to $19. It anticipates generating $315 million from the sale and netting $222 million to $267 million, to be used in large part to build a factory in Asia.

Some proceeds also will be used to repay debt, some of which was incurred by its current construction of a factory in Germany. That plant is to help meet the huge demand for solar panels used to generate electricity in thousands of European houses.

One industry analyst said the initial stock price might be a bit high, but the stock offering is reasonable.

"The demand is certainly still there for solar cells," said Jeffrey Bencik, a renewable-energy analyst with Jeffries & Co.

Capacity has been added at the local factory, which is running two 12-hour shifts seven days a week. Capacity has been added at the local factory, which is running two 12-hour shifts seven days a week.
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Company officials said they cannot comment on the stock offering, given SEC rules requiring silence prior to such moves. The firm has about 630 employees, most of them in suburban Toledo, who were offered the chance to buy the stock.

Jeff Jones, of Toledo, is thrilled by the opportunity.

"I think it's a very good thing, especially right now," he said. "It's an up-and-coming technology and we need to switch to alternate energy."

Mr. Jones said he does not feel threatened by plans for a new plant in Asia. First Solar is running two 12-hour shifts, seven days a week at the plant and is selling all the solar panels it can make, he added.

First Solar, which is incorporated in Delaware and has its headquarters in Phoenix, Ariz., was founded as Solar Cells by the late Toledo inventor and industrialist Harold McMaster. An investment firm took over the operation several years ago, and more recently it had been owned by a group that included

John Walton, heir to the Wal-Mart Stores. Mr. Walton died in a plane crash in 2005.

The company makes energy panels that have thin coatings over special glass panels. The coatings use fewer materials and are simpler to make and apply than some competitors' technologies. The panels are about 4 feet long by 2 feet wide and weigh about 25 pounds.

Employment at the Cedar Business Park factory in Perrysburg Township has more than doubled this year since a $74 million expansion, prompted by the demand in Europe. The demand stems from government regulations and incentives.

Per kilowatt hour, solar pow-

er costs about 36 cents for home-

owners and 20 to 26 cents for commercial and industrial customers, industry experts estimate. Conventionally generated electricity costs about 8 cents per kilowatt hour.

The firm said in the spring its production would amount to 330,000 panels a year, or enough by next year to generate a combined 75 million watts, or enough to power 45,000 houses.

The company also is building in Germany, and although it hasn't announced where it will build a plant in Asia, its SEC filing mentions loans and other breaks for solar development in South Korea.

First Solar, in its regulatory documents, said its sales grew from $3.2 million in 2003 to $48 million last year. However, the firm has lost money every year it has been in operation, officials have said.

Last year, it lost $6.5 million, its filing said, contradicting a spokesman's statement last spring that it had a profit. It has lost $4.1 million in the first nine months of this year.

Shareholder and analyst views will influence how the firm performs, as bottom-line financial goals will be key.

The underwriters for the stock offering are Credit Suisse, Morgan Stanley, Piper Jaffray, Cowen and Co., First Albany Capital, and ThinkEquity Partners LLC.

The company is selling 13.3 million shares and its principal stockholders are selling 4.2 million shares. The company will have an additional 51.9 million shares controlled by the company's principal owners, the estate of Mr. Walton, company chief executive Michael Ahearn, and Goldman Sachs.

The firm filed its notice to sell stock in June, but has amended the filing six times. Its recent filing said it expects to sell the stock next week.

Of the stock-sale proceeds, it said, $150 million will be spent on the plant in Asia and $30 million on plant start-up costs. An additional $26 million will repay debt and the rest will be for general expenses.

The company does not plan to pay a dividend.

Noah Kaye, spokesman for the Solar Energy Industries Association, said the industry has had exponential growth in the past five years.

A plant in Asia will help meet the growing demand for solar-generated power in Japan, he said.

"You have increasing investment and buy-ins from Wall Street from the venture capital industry," Mr. Kaye said. "I know Wall Street is very excited for the growth of this industry."

Contact Jon Chavez at:

jchavez@theblade.com

or 419-724-6128.



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