NZ Windfarms’ Uncertainty affects Windflow

NZX STATEMENT

31 August 2009

NZ Windfarms’ Uncertainty affects Windflow Technology Ltd

Windflow Technology Ltd (WTL) notes with concern the statement in NZ Windfarms Ltd (NWF) preliminary year-end announcement on Friday 28th August that there is uncertainty as to whether NWF can continue as a going concern and therefore whether it will be able to pay its debts as and when they become due and payable.

The Directors and advisors of WTL are giving due consideration to this matter as part of the preparation of WTL’s own preliminary announcement that is due by 11th September. They will be communicating with NWF as required and seeking further details on NWF’s plans to put in place the appropriate funding.

NWF has withheld three payments for Batch 3b (turbines 50-65) and Batch 4 (turbines 66-97) since August 17th.  NWF has written to WTL in regard to each payment stating that it intends withholding the payment until the issues relating to certification and fitness for purpose are resolved.  The sums involved will shortly become material if NWF withholds further payments. 

WTL has continued correspondence with NWF over the design and certification status of the WF500 turbines installed and to be installed on the TRH project.  WTL is clear that the turbines provided for TRH have been ordered, delivered and operated in accordance with the Sale and Purchase Agreement (SPA) between the parties and that the turbines provided are fit for purpose to operate at TRH.

WTL would prefer to resolve this matter amicably and will continue its efforts in this regard.

About 55 turbines installed and commissioned at Te Rere Hau (TRH) have been running in recent days (including today) in 25-30 m/s winds (90-108 km/h) when imported turbines have all shut down.

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