Wind turbine firm goes deeper in debt
The shareholders of Christchurch turbine maker Windflow Technology have allowed the struggling company to go $7.95 million deeper into the debt of mysterious shareholder David Iles.
They voted at a special meeting in Christchurch on Wednesday evening to allow the company to increase its debt to the expat Kiwi investor to a total of $14.7m (£7.38m) by taking on additional loans provided by Iles.
They also approved a capital raising seeking to raise $3.4m through the issue of preference shares on the basis of one for every three ordinary shares owned.
The shareholders approved Iles effectively underwriting that by agreeing to Iles being permitted to buy up to $2.5m of the preference shares if the rights issue was not fully subscribed to. The rights may be traded.
The shareholder approvals were needed because Iles is likely to end up holding more than 20 per cent of the ordinary shares if his holding of preference shares are converted to ordinary shares during or at the end of the five-year maturity period of the preference shares.
Windflow chief executive Geoff Henderson said the capital would be used to develop four more turbine projects in the United Kingdom which could take the total investment to seven turbines.
The company has three single turbine projects on the Orkney Islands. One at Westray has been commissioned.
An independent adviser report said there was a wide range of outcomes as to how many preference and ordinary shares Iles would control after the conversion of the preference shares.
It estimated Iles could control between 29 per cent and 59 per cent.