Windflow Technologies gains Mighty River as investor

Monday 30th June 2008

Windflow Technologies, a designer and manufacturer of wind turbines, will raise about NZ$7 million after Mighty River Power agreed to buy a 19.95% stake.

Shares of Windflow jumped 9.3% to NZ$3.28, a seven-month high, on the NZAX.

The two companies also announced that Mighty River's wind farm near Wellington will use Windflow 500 turbines. The contract would amount to about a quarter of the company's output, currently 60 turbines a year. The share placement is subject to shareholder approval and the use of the turbines requires resource consent.

"We're in a very rapid growth phase at the moment," Geoff Henderson, Windflow's chief executive, said in an interview. Negotiations to sell turbines led to Mighty River buying the stake, he said.

Windflow builds smaller turbines that use less concrete and steel per unit of production. The company uses a 'Torque Limiting Gearbox' that can cope with variation in wind gusts, according to its website.

The conditional agreement to supply turbines may lead to more sales as Mighty River is currently investigating other sites that may be suitable for the Windflow 500, they said in the statement.

Windflow raised $5 million in November through a rights issue and can raise a further $5.5 million in September when tradable options that were attached to the share issue become exercisable.

The company posted a NZ$2.2 million loss in the first half, down from a loss of NZ$3.3 million a year earlier. Sales rose to 21% to NZ$21 million.

By Jonathan Underhill

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