Friday, February 17, 2006

Clean Energy Mines for Gold on AIM

Following up on my microwind power posting last week, some of you asked how you can invest in this sector. Of the 10 companies mentioned in the article, only Clipper Windpower is public. The California-based company began trading on the Alternative Investment Market (AIM) in London as CWP in 2005.

And that brings me to my next topic, the Alternative Investment Market (AIM). The listing last week of Biodisen Biotech, a Chinese maker of environmentally friendly fertilizers and pesticides, is a sign of AIM’s growing attraction to clean technology companies. More Chinese cleantech is venturing abroad. Notably, Chinese solar company SunPower (NYSE: STP) was the top technology IPO last year.

The AIM difference is that the subsidiary of the London Stock Exchange has become the place for earlier stage, entrepreneurial companies to gain access to the public market. There is no minimum listing requirement or outside regularly review on AIM. In addition to Clipper Windpower, other US-based clean technology companies listing on AIM over the last year include Polyfuel (PYF.L) and Solar Integrated Technologies (SIT.LN). All of these IPOs were oversubscribed.

In 2005, KPMG reports that UK initial public offerings were up 40 percent to 307 in 2005 over 2004, reaching 2000/2001 levels, while US IPOs fell 14 percent to total 206 deals. Of the UK IPOs, 207 were on the AIM market and 20 on LSE’s main market, raising £3,442 million and £5,091, respectively, reflecting the smaller sized deals on AIM.

Although AIM may be better known for its junior mining and oil exploration companies, more clean technology companies are expected to take advantage of the strong appetite for IPOs in Europe. Other cleantech companies venturing to Europe’s AIM include Australia’s Ceramic Fuel Cells Ltd. (ASX: CFU) and another microwind power IPO is rumored. It is worth noting that microwind turbine makers like Bergey Windpower and Southwest Windpower have been installing their wind turbines throughout the world for almost two decades. We may also see some new wind issues on the big boards.

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