UPDATE: Clipper Windpower Shares Rise 19% On Capital Boost

Shares in renewable energy company Clipper Windpower PLC (CWP.LN) climbed 19% Thursday as it got a substantial capital boost after United Technologies Corp. (UTX) agreed to buy almost 50% of its equity.

At 1149 GMT, Clipper shares were 27.5 pence, or 19%, higher at 173.5 pence, outperforming a sightly higher Dow Jones Smaller Companies Index, up 0.29%.

United, the maker of Sikorsky helicopters and Pratt & Witney jet engines, has agreed to invest GBP126.5 million in Clipper in exchange for a 39% stake in the firm, and has also agreed to buy another 21.8 million shares from shareholders at 180 pence a share, a 23% premium to Wednesday's closing price.

The deal will give United a 49.5% stake in Clipper, the company said, and will give Clipper access to United's expertise in high-tech manufacturing.

"This is a transformational transaction for Clipper," said Chief Executive Douglas Pertz.

"Our relationship with UTC will enable Clipper to access UTC's support and expertise in areas of manufacturing, product quality and other industrial processes, while providing Clipper with equity financing to deliver our longer-term strategic goals," he added.

Piper Jaffray analyst Alastair Bishop said the capital injection relieves Clipper's short-term funding concerns.

"Today's announcement will reassure investors concerned about the balance sheet but is not a complete surprise," he said, noting that the company has in the past indicated that it was in advanced talks with third parties about raising funds.

"Today's placing clearly gives the company a cash buffer given that it remains loss-making," Bishop noted. Clipper made a first half pretax loss of GBP120.2 million.

He said key risks that remain are technology issues and the reliance on customer prepayments.

Company Web site: www.clipperwind.com

-By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com

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