Windflow to Increase Turbine Production

NZX AND MEDIA STATEMENT
26 October 2007

Windflow to Increase Turbine Production

Windflow Technology Ltd, the Christchurch-based manufacturer of wind turbines, plans to expand further in the domestic and international markets, about 100 shareholders heard at Wednesday night’s annual meeting.

The company intends to step up production to at least five Windflow 500 wind turbines a month with its new business base in Riccarton handling nacelle assembly.

Windflow chairman Barrie Leay noted the entry of “very substantial” companies into the wind energy sector, with Babcock and Brown and Vector becoming involved with NZ Windfarms Ltd, a customer of Windflow Technology, and Mighty River Power also showing interest in the sector.

Windflow Technology was now moving to continuous production of its wind turbines, said Mr Leay and had built up its technical and commercial team.

Mr Geoff Henderson, chief executive, said space within the new facility will be used to assemble 60 to 200 nacelles annually.

Staff numbers have doubled to 30 over the past year, highlighting the company's commitment to commercialising the Windflow 500.

Windflow Technology has supplied five turbines to the Te Rere Hau wind farm being built near Palmerston North. NZ Windfarms, which Windflow created in 2005, is the co-developer of the Te Rere Hau wind farm.

Following NZ Windfarms’ successful $75m capital raising in May 2007, Windflow Technology’s shareholding has reduced to 3%.

Windflow has confirmed orders for a further 44 Windflow 500 turbines to be delivered over the next 18 months, equating to revenue in excess of $30m.

Mr Henderson said the initial batch of turbines averaged 97% availability in the first 9 months of operation.

A non-binding memorandum of understanding has been completed with US interests that may lead to a demonstration project being advanced in Hawaii.

The company would soon be seeking up to $10m, in two rounds of $5m apiece, for the purposes of providing additional working capital and funding research and development of new variants of the Windflow 500. “This will increase our business opportunities and spread commercial risk” said Mr Henderson.

Shareholders were advised that Windflow plans to make a renounceable rights issue at 1-for-4 at $3.00 per new share.

Each new share will be accompanied by one separately tradable option to subscribe for an additional ordinary share. The option would be exercisable on 30 September 2008 at a price of $3.30 per new share.

Windflow plans a multi-city road show during November to inform its shareholders and other interested parties about the company’s growth objectives.

All the proposed resolutions were passed.

An audio webcast of the AGM can be accessed at www.windflow.co.nz.

Ends.

© Scoop Media