3W Power Plunges as Cyprus Poses Payment Risk: Frankfurt MoverAngela Cullen and Erhard Krasny
3W Power SA fell the most ever after saying the banking crisis in Cyprus may damage a key client’s ability to pay what it owes the company’s AEG Power Solutions BV energy control-systems division.
3W Power dropped as much as 51 percent and traded down 47 percent at 61 cents at 11:54 a.m. in Frankfurt. That reduced 3W Power’s market value to 33.5 million euros ($43.3 million). Volume was almost 32 times the three-month daily average. The company’s stock started trading in July 2008.
The company, which reported a 16 percent drop in AEG’s fourth-quarter order backlog and an 82 percent plunge in earnings before interest, taxes, depreciation and amortization, postponed the publication of its annual report. The board needs more time to prepare the forecast and risk sections amid payment delays from an undisclosed European customer, Luxembourg-based 3W Power said in a statement late yesterday.
The delays “have been exacerbated by the current banking situation in Cyprus,” 3W Power said. Failure to collect the money owed from the client, which centralizes procurement through a Cyprus subsidiary and which contributes more than one-third of AEG’s receivables, “could present significant financial difficulties for the company.”