Expat banker stumps up $10m for Windflow
Expat investment banker David Iles is providing $10.5 million to Christchurch turbine manufacturer Windflow Technology.
Media-shy Iles, who lives in New York but has family in Auckland and visits for holidays, has provided both a loan and bought preference shares to keep the turbine maker going and further develop its sales in Britain.
Iles has bought $2.5m of the $2.9m raised through the issue of preference shares at 50c a share.
The other $400,000 came from existing and a few new shareholders, Windflow chief executive Geoff Henderson has confirmed.
Windflow said it had alloted 5.848 million preference shares, costing 50c each, to shareholders.
The company raised just over $2.9m through the issue of preference shares, which falls about $500,000 shy of the $3.4m target.
Iles has also provided a loan of £4m (NZ$7.986m) to Windflow to pursue more sales in Britain and the overall strategy of the company. That is in addition to other earlier loans of £3.38m (NZ$6.75m) he provided.
Both the capital raising just completed and taking on more debt were approved by shareholders in early December.
The new preference shares carry a dividend rate of 10 per cent.
Dividends start in 12 months' time.
Windflow also said it would pay a third dividend to preference shareholders who bought preference shares in a capital raising in March last year. That will cost the company $113,731.
Those preference shares are unlisted. The dividend will be paid to holders who were on the share register on December 31.
Windflow has told shareholders it has received a claim of $42,176 from NZ Windfarms over a "power curve" warranty for a turbine supplied by Windflow.
If similar claims were made for the remaining 91 turbines yet to come out of warranty, the total of claims could be $4m. That would be in addition to the $2.9m Windflow had provided for remaining warranty claims.
Windflow said it had made no provisions for the "power curve" claims because it assessed the turbines were meeting their warranted performance.
Henderson said: "We take the view that no claims should be made until July 2015. So it was a bit of a surprise that we got it before Christmas. In addition we don't expect to pay out anything on this. We need to talk that through with NZ Windfarms."
The power curve warranty was about the performance of the turbines.
"We will be having a conversation with them over the next weeks and months," Henderson said.
"We recognise we haven't put out as much good news as we hoped last year. Progress has been slower than we hoped. But 2014 is a new year and we are looking forward to getting some more milestones under our belt."