Windflow Technology secures funding

TAMLYN STEWART
Last updated 15:54 07/12/2012

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Struggling Christchurch wind turbine maker Windflow Technology says it has secured the funding it needs to keep going until it can complete a capital raising early next year.

The company did not say how much funding it had secured in total but said funding had been provided by a mix of equity and short-term debt facilities provided by existing shareholders.

In a separate announcement the company said it had issued 875,000 ordinary shares at 40 cents per share to large shareholder David Iles, raising $350,000.

That takes Iles' stake in the company from 11.9 per cent to 15.6 per cent.

Windflow shares last traded at about 19 cents a share and have traded between 33 and 15 cents a share during the last year.

The cash-strapped turbine maker reported a $4 million loss for the year to June 2012 due to a lack of sales and Windflow said last month it would need bridging finance to stay afloat until it could hold a substantial capital raising next year.

Meanwhile the company also announced today it had secured an agreement for its second British-based Windflow 500 turbine, destined for New Holland farm on the main island of Orkney, north of Scotland.

Subsidiary Windflow Hammer Limited now has a lease agreement with the landowners and financing approval for the project. 

Windflow Hammer would develop the project and would initially own the turbine. The landowners would have a five-year option to buy some or all of the project as it progresses.

It is the second of up to three Windflow turbines for Britain which the turbine manufacturer will fund through its July 2012 construction finance agreement with major shareholder David Iles.

Once operating, the turbine will earn revenue of approximately 22 pence per kilowatt hour through the British government's feed-in tariff scheme, providing returns on investment of approximately 20 per cent to 30 per cent per year before tax, the company said.

The nacelle will be assembled at Windflow's Christchurch facility before being shipped to Britain late next year.

The nacelle of the first Windflow turbine destined for Britain will be installed at the Hammer farm on Westray, Orkney Islands early next year.

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- The Press

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