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Windflow prepares for liquidation

Thursday 13th October 2011

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Commitment of $15,000 apiece from just 43 Windflow Technology shareholders stands between the two-bladed wind turbine pioneer and liquidation, papers filed with the NZX today show.

Windflow chairman Barrie Leay has called a special shareholders’ meeting for Nov. 2 for a vote on the appointment of liquidators from the Christchurch offices of accounting firm BDO.

The company has been trying to raise an emergency $2 million – a target already scaled back from $2.4 million - through an unusual share purchase plan that seeks a commitment of $15,000 per shareholder, irrespective of the size of their holding.

So far, around 49 shareholders representing just 6 percent of shareholders have stumped up, raising $728,000, while private placements have raised another $620,000, leaving the company short by $652,000 – equivalent to subscriptions from an additional 43 shareholders.

Company founder and chief executive Geoff Henderson has also injected personal funds in the interim, secured against spare parts for turbines manufactured in anticipation of building the Long Gully wind farm for its 19 percent shareholder MightyRiverPower, which has since put the project on ice.

MRP has not indicated whether it is supporting the capital-raising.

The notice to the NZAX platform, where Windflow is listed, indicates the $400,000 cut in the target capital to be raised also represents a business risk, since it will “impinge on the company’s ability to deliver operationally on the opportunities for new revenue being sought” because it will cut engineering, production, marketing and administration resource.

The SPP has been extended to Oct. 20, and the company says it will advise by 5pm the following day whether the share subscription target has been met.

Either way, the meeting will be held. The resolution to liquidate will require a 75 percent vote, with directors vowing to vote against the motion if the funds sought are secured.

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