Windflow Shareholders Support Preference Share Issue

Windflow Technology Ltd will increase its sales capabilities to meet anticipated demand in the UK market.


15 Mar 2013

Windflow Technology Ltd will increase its sales capabilities to meet anticipated demand for the Windflow 500 wind turbine in the UK market following the closing yesterday of the Company's rights issue to subscribe for redeemable convertible preference shares.

The Christchurch-based wind turbine designer and manufacturer confirms that the offer achieved in excess of the minimum required subscription level of $2 million.

In addition the Company is pleased to advise that one of its shareholders has offered to invest a further $2 million in preference shares, which the Company intends to issue by means of a private placement at the same price ($0.50) but following initial allotment of the preference shares pursuant to the rights issue.

"Our many existing shareholders, along with the new investors who have acquired rights, are supportive of our objective to take one of the world's most robust, yet light-weight, wind turbines into global markets," said Geoff Henderson, Chief Executive of the NZAX-listed company. "They understand the significant opportunity presented in Britain due to strong UK Government programmes in renewable energy."

"Our British subsidiary Windflow UK is well under way with our initial UK work programme based around installation of three turbines in the windy Orkney Islands. The first turbine exported from New Zealand is now generating electricity on the Scottish island of Westray and generating revenue for us. This turbine earns the same as about five to ten turbines in New Zealand, revenue that is backed by an inflation-linked UK-Government tariff contracted for 20 years."

"With an annual investment return ranging up to 30% (depending on wind speeds), relative ease of planning due to the turbine's low tip-height, and the highest output for a turbine with such a low tip-height, there is a compelling case for purchasers of the Windflow 500."

Having provided all existing shareholders with the first opportunity to invest in the preference shares (bearing a preferential dividend of 10% p.a.), and having received such interest in the opportunity, the Company may now consider further placements of the preference shares with 'habitual' private and institutional investors.

"We have achieved well over 80% of the rights issue target of $5.1 million. We can now immediately move forward with our plans to grow sales by purchasing components to reduce turbine delivery times and developing projects," said Mr Henderson. "The first step is to appoint two additional members of the Windflow UK sales team to work alongside our dealer network. At the same time we intend to appoint a deputy CEO who will initially be based in the UK before relocating to New Zealand later this year."

"We now have diversified marketing opportunities through our licensed partner, General Dynamics SATCOM Technologies based in the United States, and under our own banner in the UK and other markets."

The final amount raised will be known when shares are allotted by next Thursday 21 March 2013.

For further information: Geoff Henderson, CEO/Director, Ph 03 365 8960.

The redeemable convertible preference shares will not be listed on a registered exchange. NZX Limited accepts no responsibility for any information contained in this statement.