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September 5, 2007 1:35 pm

Oerlikon would consider approaches for solar division, company source says

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Oerlikon, the listed Swiss technology group, would consider approaches for the sale of its solar division, said a company source.

The source said that although the company was not actively looking for a sale, the board would consider holding talks with interested parties.

Oerlikon Solar, a business unit embedded into Oerlikon’s coating segment, had 2007 sales figures of EUR 77m.

The source suggested that potential bidders could include companies focusing on the thin film solar sector, such as QCells, the listed German solar cell developer, and First Solar, the listed Arizona-based solar module manufacturer. He said the company could also see interest from smaller players in Japan, which need some elements of thin film manufacturing.

“Even the really large players like Siemens and General Electrics could be potential candidates. They produce wind turbines and power plants; maybe they would like to move into solar,” he said.

A Siemens spokesperson said Siemens does not speculate on market rumours, while GE declined comment.

An industry analyst said Oerlikon’s solar division would make a good target. “There have been rumours that company is looking to sell its solar division. This could fit in nicely for some larger players as it’s a profitable business. I believe the company wants to focus on its core activities, which is why it may sell the unit,” the analyst suggested.

An Oerlikon spokesperson, however, emphasised a sale was not actively on the agenda. Oerlikon was interested in taking advantage of the unit’s high growth rates in-house, he said.

Regarding newspaper articles about a separate listing of the unit, the spokesperson said that Oerlikon could opt for this alternative with a view to raising funds to finance further growth projects. At this stage, there was no capital constraint, he added.

The spokesperson declined to comment on whether Oerlikon has been approached by suitors showing interest in the unit.

According to the spokesperson, Oerlikon expects very high growth rates for its solar business. He predicted annual growth rates of 50%. Target sales for 2007 were CHF 300m (EUR 182m), he said; adding that this was a conservative estimation. The growth would be achieved mainly organically, accompanied by bolt-on acquisitions along the value chain, he said.

An industry banker said, with regard to the sector in general, that the European market is getting more international. He explained that Central European solar energy related companies are expanding into South Europe either with partners or opening their own subsidiaries. He added that these European companies are more open towards large international players outside of Europe who have an interest in entering this accelerating market.

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