Vestas Bond Plunges as Cash Outlook Darkens: Copenhagen Mover

Vestas Wind Systems A/S’ bond fell the most in four months in Copenhagen trading after the world’s biggest wind turbine maker cut its free cash-flow guidance, increasing the chances of a rights issue, Nordea Bank AB said.

Vestas’ 4.625 percent note due March 2015 yielded 18.496 percent at 10:21 a.m. local time, its highest since mid-August, as the bond sank. Vestas shares retreated the most in 10 months, falling 16 percent to 25.90 kroner, the stock’s lowest price since July 31.

Vestas Chief Financial Officer Dag Andresen is seeking to sell as much as 20 percent of the company to drum up cash. The Aarhus-based turbine maker said today it no longer expects a positive free cash flow this year and will cut 3,000 additional jobs after reporting a loss when most analysts had predicted a profit.

“Free cash flow in the third quarter has been very weak,” triggering the cash flow downgrade, Patrik Setterberg, an analyst at Nordea, said in an investor note. “This development notably increases the risk of a near-term rights issue.”

Vestas doesn’t have plans for a capital increase at this stage, Andresen said in a conference call. The company reported a net loss of 175 million euros ($225 million), compared with an average forecast of a 20 million-euro profit, according to a Bloomberg survey of 13 analysts. Vestas will cut headcount to 16,000 by the end of 2013 from 22,721 in 2011.

Vestas said today it no longer expects positive free cash flow this year, guiding for between zero and 500 million euros of cash losses.

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