Capital-raising aims to complete wind farm

Christchurch wind farm business NZ Windfarms intends to raise capital to complete the 97turbine Te Rere Hau farm.

But chief executive Steve Cross would not reveal yesterday how much was needed for that and to secure the continuing trading of the firm.

NZ Windfarms told the NZX late Friday there was uncertainty that the company would get the cashflows predicted and be able to raise additional funding needed to complete its Te Rere Hau wind farm, in the Manawatu.

Its external auditor had raised uncertainty on whether NZ Windfarms, which is almost 20 per cent-owned by Auckland lines company Vector, was a going concern.

NZ Windfarms is in dispute with Christchurch turbine-maker Windflow Technology, originally its parent, because Windflow has not achieved International Electrotechnical Committee (IEC) certification standard for the turbines.

Windflow has told NZ Windfarms the turbines supplied and intended to be supplied will not meet the IEC certification standard. NZ Windfarms is reserving its position over whether it can seek remediation or mitigation with regard to the turbines.

Cross said yesterday NZ Windfarms aimed to resolve the issue of whether the turbines it was buying from Windflow Technology were "fit for purpose", before tackling other funding issues.

Cross said it was looking for Windflow's co-operation to appoint an expert to determine that.

The expert would need access to the design, drawings and other intellectual property related to the turbines which are assembled in Windflow's factory in Christchurch, he said.

NZ Windfarms has posted a profit of $961,000 for the year to June 2009, 60 per cent down on the previous year's $2.42 million.

NZ Windfarms will have spent $20m by September 30 buying the other 50 per cent of Te Rere Hau wind farm from joint venture partner NPBB. A final $2.1m payment is due on September 17.

The firm said it now needed additional funding to complete the wind farm at Te Rere Hau. However, the board had decided it would not finalise a funding strategy until it had a better understanding of the implications of not receiving an IEC certificated turbines.

NZ Windfarms said its business plans and budgets indicated cash generated from operations was insufficient for the firm to keep trading for at least 12 months from the date of the financial statements.

But the firm was proposing to raise capital to finish Te Rere Hau and with completion that wind farm's cashflow projections showed sufficient net cash surpluses to fund the continuing running of the wind farm.

The timing and method of raising funds would be determined by the board after progress with the IEC certification issue.

- © Fairfax NZ News