Activist investor urges ABO Wind to give up legal form change

Activist investor Enkraft Capital GmbH is stepping up pressure on ABO Wind AG (ETR:AB9) to abandon a plan for a legal form change claiming it is not in favour of the German renewables developer and its minority shareholders.

At the beginning of June, ABO Wind said it was considering a change of legal form into a partnership limited by shares, which is abbreviated in German as KGaA. This will give the company more opportunities in the capital market as it needs more fresh capital to finance projects, it said at the time.

Since the announcement, ABO Wind has lost nearly a quarter of its market capitalisation with its share price in Frankfurt plunging about 24% to EUR 50.20 (USD 54.27) as of the early afternoon on August 29.

According to Enkraft's managing director Benedikt Kormaier, the announcement of the planned change of legal form is responsible for the drop. More specifically, he estimates that the management team's adherence to the plan alone has destroyed around EUR 146 million in value up until now.

In a letter to ABO Wind's management and supervisory boards, seen by Renewables Now, Kormaier says that the share price decline is solely attributable to the announcement as there has been no further negative corporate news that could have influenced the share price since then.

According to Kormaier, the goal behind this move is to preserve the interests of the major shareholders -- the Ahn and Bockholt families at the expense of all other shareholders.

Kormaier claims that "all major institutional investors known to us have already liquidated their holdings in the company or begun to sell their shares". Enkraft, which holds about 5% of ABO Wind, has not sold and does not plan to sell shares, he noted.

Kormaier is hinting that Enkraft is ready to explore all possible legal paths to look into any potential wrongdoing or possible breaches of duty by the board members that might have harmed the company and its shareholders.

A potential change of the legal form should be voted on by the general shareholder meeting.

(EUR 1.0 = USD 1.081)

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