Thyssenkrupp pulls trigger on long-awaited IPO of hydrogen division Nucera

By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) -Thyssenkrupp launched on Monday the long-awaited listing of its hydrogen division Nucera, suggesting its new chief executive intends to waste no time in reviving the fortunes of the embattled conglomerate.

Thyssenkrupp (ETR:) Nucera, a 66:34 joint venture with Italy’s De Nora, is targeting proceeds of up to 600 million euros ($647 million) via the sale of new shares, confirming initial listing plans first outlined in early 2022.

The initial public offering (IPO), which was delayed by weak market conditions after the Ukraine war, is expected to be completed before the summer break, depending on market conditions, the company said.

It comes as hydrogen technology is getting a boost from favourable legislation in the United States and Europe, which are both seeking to strengthen the technology to help carbon dioxide-heavy industries, including steel and chemicals, to decarbonise.

“The Nucera IPO is essential for the transformation of ThyssenKrupp. It will provide Nucera with urgently needed funds for expansion,” said Ingo Speich of Deka Investment, a top-20 shareholder of Thyssenkrupp.

“Nucera can only stay ahead in the competition for hydrogen technology with significantly more capital.”

Other investors are more sceptical.

Joerg Schneider, portfolio manager at Union Investment, said the company still needed to establish a track record in the fast-growing field of alkaline water electrolysis, adding Nucera’s valuation depended on project execution.

“I think they will have to expect a discount. Also because hydrogen stocks haven’t been doing so well lately,” he said, adding Union Investment would still take a look at the offering.

Thyssenkrupp Nucera CEO Werner Ponikwar told Reuters that the group had been realising projects for half a century and was able to realise big projects, confirming the group was planning to expand annual capacity to 5 gigawatts by 2025, from 1 GW now.

HYDROGEN HYPE

The IPO announcement comes less than two weeks after Thyssenkrupp’s new CEO Miguel Lopez took over from Martina Merz, underlining his commitment to steer the German industrial icon into calmer waters and raise its languishing share price.

Thyssenkrupp has faced delays in two key areas of restructuring – the partial sale of its steel division as well as the IPO of Nucera – which was among the reasons for Merz’s surprise resignation earlier this year.

“A potential IPO would enlarge the financial flexibility of Thyssenkrupp Nucera and raise its profile as a leading supplier of technology for the production of green hydrogen,” Lopez said.

Sources told Reuters in April that Thyssenkrupp was targeting June for a new listing attempt that could value the business at up to 5 billion euros.

Baader Bank analyst Christian Obst said a valuation of 4-5 billion euros would be ambitious.

The listing, which is run by Citi and Deutsche Bank (ETR:), will primarily consist of new shares, Thyssenkrupp Nucera said. Thyssenkrupp is also expected to sell some of its own shares, but plans to retain a majority in the business.

De Nora said it remains committed to its long-standing partnership with Thyssenkrupp, but declined to say whether it would sell any shares

Thyssenkrupp shares, which have gained 16% since late April in anticipation of a listing, were up 0.3% by 1425 GMT. De Nora’s shares were down 0.9%.

Nucera builds electrolysers to produce green hydrogen, a field in which it competes with Norway’s Nel, Britain’s ITM Power, France’s McPhy Energy and U.S. company Plug Power (NASDAQ:).

It focuses on so-called alkaline water electrolysis, which Credit Suisse reckons will make up 60% of the global market by 2030, as it is more suitable for big projects, while proton exchange membrane electrolysis is seen at about a third.

At the end of March, Nucera’s order backlog stood at 1.4 billion euros. First-half sales were up 74% at 306 million euros, while the group’s earnings before interest and tax rose 87% to 13.3 million euros.

($1 = 0.9277 euros)

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