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Windflow options raise half targeted amount

Friday 3rd October 2008

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Shareholders in Windflow Technology, the maker of turbines used in wind farms, exercised only half the options they were entitled to as slumping world markets drove down the stock price.

The Christchurch-based manufacturer raised NZ$2.6 million from the exercise of options that closed on Sept. 30, chief executive Geoff Henderson said in a statement today.

The close-out of the options "coincided with the financial crisis, falling global markets and a general lack of investor confidence," Henderson said.

The options were exercisable at NZ$3.30 apiece, above the stock's most recent price of NZ$3.05. The shares soared to about NZ$4.15 after the company announced in late June that state-owned Mighty River Power agreed to take a 19.95% stake and order Windflow turbines for a wind farm near Wellington.

Since then the share have tumbled about 24%, lagging behind the NZX 50 Index. Shareholders gained the options in November 2007 when Windflow made a 1 for 4 rights issue at NZ$3 a share, and attached one option to each share sold. The original sale was fully subscribed and raised NZ$5.04 million.

Warren Head, a spokesman for Windflow, said the company's reserves will be "quite strong" as a result of the options and funds from Mighty River for its holding.

The company currently has 92 turbines on order and said there is potential to win orders for as many as 275.

By Jonathan Underhill

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