Oceanlinx to Raise Funds for Growth Before Possible Share SaleLouise Downing
Oceanlinx Ltd., an Australian manufacturer of wave-power generators, plans to raise A$20 million ($20.6 million) to expand in Europe and the U.S. before holding a possible share sale.
The company intends to raise the funds from corporate equity in the first half, preparing it for a “liquidity event” within two years, Chief Executive Officer Ali Baghaei said in an interview in London.
The manufacturer, based in Sydney, is vying with competitors Pelamis Wave Power Ltd. and Aquamarine Power Ltd. to bring wave-power technology to market. Companies that generate electricity from waves, at a cost almost four times that of coal-fired power, require funding to expand projects that haven’t yet been proven on a commercial scale.
Oceanlinx is targeting growth in Northern Ireland, where Minesto AB won a permit to test a tidal-power machine in November, and OpenHydro, Irish utility Bord Gais and DP Marine Energy Ltd. also plan similar projects.
“I have started discussions with the government in Northern Ireland and I intend to open an office in Belfast and appoint some local professionals,” Baghaei said. The region is promoting renewable energy as it seeks to raise the share of clean-power use to 40 percent by 2020 from about 14 percent now.
“Another part of the money will be used for similar types of activity in the U.S. where we have offices that we need to man,” Baghaei said. Oceanlinx has been in talks with a power utility in Hawaii for more than five years, he said, without naming the company.
Oceanlinx already said a year ago it was studying an initial share sale. It’s testing a 1-megawatt machine at Port Macdonnell in South Australia and also plans projects in Scotland, Portugal, California, China and Japan.
The company’s cost to produce power will be competitive with onshore wind within three years, and will rival fossil fuels in five years, Baghaei said. Wave energy currently costs about $496 a megawatt-hour, according to Bloomberg estimates. That compares with $127.70 for coal-fired power.
Pelamis and Aquamarine Power have also said they’re looking for strategic investors and partnerships to help steer their technology to market. Irish turbine maker OpenHydro won investment of as much as 130 million euros ($176 million) from France’s DCNS SA last month, while Siemens AG completed its acquisition of Marine Current Turbines Ltd. last year.