By Christoph Steitz and Tom Käckenhoff

FRANKFURT/DUESSELDORF (Reuters) – Thyssenkrupp (DE:) unit Uhde Chlorine Engineers aims to rake in up to 600 million euros ($687 million) by selling new shares in a possible initial public offering this year, betting on the booming hydrogen sector it supplies with equipment.

Based on an estimated valuation of between 3 billion and 6 billion euros, analysts estimate that this would be a stake in the company of approximately 10-20%. The division is currently being rebranded Thyssenkrupp Nucera. It could go on the stock exchange as spring.

It is not possible to calculate the potential profits of new shares in excess of 500-600 millions euros from existing shareholders Thyssenkrupp or Italy’s De Nora. These current owners own Thyssenkrupp nucera through a 66/34 split.

“Demand for our products is immense. Thyssenkrupp Nucera CEO Denis Krude told Reuters that they want to take advantage of this opportunity. Investors will have a more detailed look at the company on Thursday.

Thyssenkrupp floated the initial idea for an IPO in its hydrogen business back in May 2012.

Krude has been leading the Division since October 2016. He stated that “we are a technology leader in electrolysis and we have been in this business for decades.”

Thyssenkrupp Nucera, the largest supplier of chloralkali membrane technology needed for hydrogen production, is competing against Japan’s Asahi Kasei and China’s Bluestar Beijing Chemical Machinery.

It also participates in alkaline electrolysis (AWE), which is a critical requirement to generate hydrogen from renewable energy. This pits it against the UK’s ITM Power, France’s McPhy Energie SAS, and Norway’s Nel ASA.

ThyssenkruppNucera’s September fiscal year ended with earnings before tax and interest of 27 million Euros, while its sales were 319 Million euros. The latter figure is expected to increase to 900 to 1 Billion euros in 2025/26.

The order backlog stands at approximately 1.3 billion Euros, and AWE accounts for around 70%.

Krude declared that “the market has immense potential.” Nucera plans to invest 200 million-300 million between 2024/25 and 2024/25. Of this, 150 million to $200 million will be used for strategic moves such as partnerships, production, or smaller deals.

Europe and especially Germany wants to be the global leader in green hydrogen, which can only be produced from renewable resources and therefore is carbon-neutral. It is doing this to decarbonise and reduce its emissions.

Thyssenkrupp makes everything, from steel to submarines, car parts to fertiliser plants and fertilizer plants. However, it hasn’t made a decision about whether or not to proceed with an IPO.

Volkmar Dinstuhl who heads the Multi Tracks division at Thyssenkrupp, said that “for the Thyssenkrupp company the most important thing is the so-called valuation crystallization.”

Dinstuhl refused to disclose how much Thyssenkrupp might sell in a secondary offer, in the event of an IPO.

($1 = 0.8738 euro)