Windflow Update

Windflow Technology Limited held its AGM on 31st October 2012.

1 November 2012

Windflow Update

Windflow Technology Limited held its AGM on 31st October, and reported to Shareholders in attendance on the matters outlined below.

At their last review, the Directors had determined that the ability of the Company to remain a going concern rested upon several things occurring.

The Directors have received indicative commitments of funds from various parties to maintain the Company’s liquidity through until a capital raising as described below.  

The first exported turbine in the Company’s history was shipped during October and is on track to be commissioned early in 2013. The commencement of sales of turbines in the UK beyond that already achieved from the first turbine has been progressed to a point where one site is in financial close and another one is waiting on a grid offer, which Scottish and Southern Energy have confirmed is pending.

The accord with NZ Windfarms over the mechanism for settling warranty claims has been maintained. Windflow engineers have partially but not completely demonstrated maintenance procedures from the use of the new work platform and are now working on several open issues. Once these issues are resolved it is expected that proving that such procedures are cost-saving will be significantly easier.

The Company is working towards a more substantial capital raising which will proceed within two months. The Directors have taken legal and investment banking advice in order to establish the basis of the offer to Shareholders. are formulating that offer currently, and have formed a Due Diligence Committee to oversee the drafting of the offer document.

The Company has canvassed some of the larger shareholders and received comfort that it can obtain sufficient funding to meet its $1.5 million funding requirement in the year to June 2013. It is however, still in the process of securing bridging finance between now and the close of the capital raise.

As previously advised, in other initiatives the Company has commenced a process to seek buyers for the Westray project, expected to close in the first half of 2013.  It is also prospecting several parties inviting interest in investing in Windflow United Kingdom (WUK) through the provision of any of equity capital, construction finance, and prospective development sites.

Initial legal documents have been prepared for GD SATCOM to progress the warranty insurance and performance bond availability and weekly teleconferences initiated to complete the process. One of the turbine sales outlined above will require the provision of this facility.

As reported previously, on 20 July 2012, the United Kingdom Government published its response to the consultation on Phase 2B of the Feed-in Tariffs (FIT) Comprehensive Review. Subject to the parliamentary process required by the Energy Act 2008, these decisions will be brought into effect via modifications to the Standard Conditions of Electricity Supply Licenses and associated amendments to the FITs Order that will be laid before the United Kingdom Parliament.  The changes were to take effect on 1 December 2012. To date the order has still not been laid before Parliament.   

On-going licensing opportunities have been delayed while the above matters have taken priority.

Angus Napier and Michael Chick were elected to the Board and replace Keith McConnell and Simon Young who both retired by rotation. Michael Chick has been elected Chair of the Board.

ENDS 

 For further information please contact Michael Chick or Geoff Henderson on 03 365 8960