UTC has agreed to conditionally subscribe for 84,337,124 shares at a subscription price of £1.50 per share, representing approximately 39.3% of the enlarged issued share capital of Clipper.
Additionally, UTC has confirmed it intends to launch a partial cash offer, conditional (among other matters) on the subscription, to purchase up to 21,804,559 Clipper shares from existing shareholders at a price of £1.80 per share, thus increasing its ownership of the enlarged issued share capital up to approximately 49.5%.
In the event that UTC receives tenders for fewer shares than the target number, certain shareholders have entered into a call option with UTC pursuant to which, subject to completion of the subscription, they will sell sufficient shares to ensure UTC obtains ownership of 49.5% of the enlarged issued share capital.
The subscription is subject to, inter alia, shareholder approval. The issue and allotment and the issue of shares pursuant to its terms is projected to take place on 12 January 2010.
Clipper says it expects the subscription to:
- Significantly strengthen Clipper's balance sheet and enable Clipper to enhance its operations and pursue its strategic initiatives;
- Facilitate financing of Clipper projects by traditional project financing sources;
- Represent a strategic investment by a global and highly respected company providing access to UTC's support and expertise in areas of manufacturing, product quality and other industrial processes;
- Strongly position Clipper to pursue the opportunities expected to become available through any growth in the US and offshore wind markets over the coming years; and
- Allow existing shareholders to continue to participate in the Company, sharing in the potential upside from a market recovery and any resulting growth of the company’s operations.
Commenting on the transaction, Clipper's President and CEO, Douglas Pertz, says: “This is a transformational transaction for Clipper, bringing substantial capital from a strategic investor who is one of the world’s leading industrial technology companies.
“Our relationship with UTC will enable Clipper to access UTC's support and expertise in areas of manufacturing, product quality and other industrial processes, while providing Clipper with equity financing to deliver our longer-term strategic goals. Following this transaction, we believe there is a tremendous opportunity for Clipper to grow its market share and take its world-class technology to new markets.”