First Wind stays course after IPO fails 

First Wind Holdings LLC plans to continue building wind farms in Maine, despite its failure Thursday to go public and sell stock to raise money.

“We are continuing to move forward with our projects in Maine and elsewhere,” said John Lamontagne, a company spokesman. “We’re continuing with our strategy, and Maine is an important part of that strategy.”

Lamontagne acknowledged, however, that the company has yet to arrange financing for the 40-turbine wind farm it began developing earlier this month near Lincoln. The $150 million Rollins project is scheduled to be completed by spring, according to First Wind.

But a financial analyst and critic of the wind industry said Thursday’s events threaten First Wind’s survival, and that it may need to tap a new round of federal stimulus funds to help pay for Rollins, which has a capacity of 60 megawatts.

After months of preparation, First Wind abruptly canceled its plans to go public after its stock failed to launch within the price range the company was seeking. The Boston-based company had first hoped to raise as much as $312 million from its initial public offering. It wanted to sell 12 million shares of stock and price each share between $24 and $26. First Wind had planned to use money from the stock offering to ease its large debt load and fund future growth.

Wednesday, on the eve of the IPO, the company reduced the estimated price range to $18 to $20 a share, or $228 million. But that 25 percent cut wasn’t enough.

Thursday morning, the company announced it was canceling the sale and released this statement: “While we received significant interest from potential investors during the marketing of our IPO, the terms that the IPO market was seeking at this time were not attractive to the company,” said Paul Gaynor, CEO of First Wind. “First Wind is well positioned to grow in its core markets. We have a successful track record developing, building, financing and operating our portfolio of projects in the Northeast, the West and Hawaii.”

In Maine, First Wind operates two of New England’s largest wind farms, Mars Hill in Aroostook County and Stetson I and II in Washington County. In addition to Rollins, it has begun construction on major wind farms in Vermont, Utah and Hawaii. It also has been considering other sites in Maine for wind energy development.

First Wind has two large financial backers, the D.E. Shaw hedge fund firm and Madison Dearborn, a private equity firm. But the company has debt exceeding $500 million, and had planned to use money from the IPO to pay down loans.

Lamontagne, the First Wind spokesman, said the company has demonstrated its ability to raise private money and will continue on that path.

But William Downes, a Cape Elizabeth financial analyst, said he’s skeptical that First Wind can attract the needed capital.

“I don’t know where they’re going to get the money,” he said.

The Rollins project, Downes said, has the potential to be completed because it has a lucrative power contract that can be sold. It also could qualify for an extension of grants for renewable power, if the program is approved by Congress. But unless Shaw and Dearborn put in more money, or First Wind finds a buyer, Downes said, the company could go under.

First Wind discloses this risk in recent financial filings. It says it has substantial, short-term debt and insufficient money to pay back loans. “Failure to comply with these obligations could result in an event of default under those agreements, which could be difficult to cure, or result in our bankruptcy,” the company says.