Cleantech IPOs take a swim in U.S. waters

Two cleantech companies took the plunge onto the New York Stock Exchange today, amid a tumultuous market and shaky support for green technology in the U.S.

Jiashan, China-based ReneSola (NYSE: SOL), a maker of silicon wafers for the production of solar cells, and Surrey, U.K.'s Cascal (NYSE: HOO), which provides water and wastewater services, both started trading after pricing at the low end of their expected ranges.

ReneSola, which already trades on London's Alternative Investment Market, priced 10 million American Depositary Shares at $13, raising $130 million, but was up only slightly at $13.20 in afternoon trading.

The $13 pricing represents a 9.7 percent discount on Monday's closing price of ReneSola's shares on London's AIM.

The company originally expected to price between $15 and $17.50.

Cascal also wasn't wowing the market, pricing 12 million shares at $12, and hitting a low of $11.70 in the afternoon.

It's a tough time to have an initial public offering for cleantech, and especially for solar, which was pulled down by bad news out of San Jose, Calif.-based SunPower (Nasdaq: SPWR) last week (see SunPower shares drop on fourth quarter report).

The solar sector also missed out on getting an extension to tax incentives written into energy legislation passed in December in the U.S., and faces a changing subsidy market in Europe.

"You throw all that together, and throw in overall market conditions being extremely volatile, and obviously your high beta, high multiple, high growth and more speculative names are going to get hit the hardest," Paul Clegg, a cleantech analyst with Jefferies & Co., told the Cleantech Group.

Xinyu, China's LDK Solar (NYSE: LDK), a competitor to ReneSola, hopped on the U.S. market last year. And despite LDK's current problem dealing with the accusation of supply discrepancies, the company may have gotten in under the gun (see LDK audit committee finds no material errors).

"There was a perception that there was an open window in the market for a long time, and now people are asking themselves whether or not that's closed," said Clegg.

"I don't think we really know the answer to that yet."

And it's not just cleantech or the U.S. that's being affected; rocky markets around world have caused at least 25 companies to pull their planned offerings this month, according to data compiled by Bloomberg.

In the States, Seattle, Wash.-based biodiesel producer Imperium Renewables started out the new year by putting its IPO on the backburner, a planned $345 million share sale (see Imperium Renewables puts IPO on hold).

Imperium's move came despite a big boost from the energy legislation for the biofuel industry, unlike solar, with new regulations calling for the production of 36 billion gallons of biofuels by 2022, a fivefold increase from current production levels.

"I don't think people are quite ready to declare the pain completely over with at this point," said Clegg, referring to the overall U.S. market.

"I think we're still trying to determine whether there's more to come or whether that's already been fully reflected in the market and that going forward we'll have a more positive outlook."

But this isn't just a trend for the new year. Back in November, Voorhees, N.J.-based American Water Works, one of the largest water utility holding companies in the U.S., had its planned IPO shelved by Essen, Germany-based parent RWE (OTC: RWEOY).

RWE cited unfavorable conditions in the U.S. capital market for putting the kibosh on the proposed $1.5 billion offering (see American Water IPO put on the backburner).

Cascal, with its more modest share sale, appears to have decided to ride out the market despite the naysayers. The company originally planned to sell 16.7 million shares at $17 to $19 apiece, but revised its range to $12 to $13 and the number of shares to 12 million.

Cascal plans to use the cash from its portion of the IPO to repay debt, for acquisitions, to develop projects, and for working capital.

Biwater Group, which will hold a 59 percent stake in Cascal after the offering, sold 3.3 million shares in the IPO.

JPMorgan served as the lead underwriter for Cascal's share sale, with Credit Suisse, Janney Montgomery Scott and HSBC also underwriting the IPO.

ReneSola, which sold all of the ADSs in the offering, says it plans to use its proceeds to expand the company's facilities and to purchase additional equipment and raw materials.

Credit Suisse Securities and Deutsche Bank Securities acted as joint book runners for ReneSola's IPO, and Piper Jaffray & Co., Lazard Capital Markets, and Oppenheimer & Co. acted as co-managers.

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