Wind turbine company has sights on UK

Windflow Technology is asking its shareholders to approve the company's investment in three UK turbine projects. Photo / Gary Rodgers Magnum Images

Kiwi wind turbine manufacturer Windflow Technology is looking for approval from its shareholders to go ahead with three projects to give it a foot in the UK market.

In a letter to shareholders this week, chairman Heugh Kelly argued the case for the company to invest in three turbine projects in Scotland.

Windflow's directors wants to take a loan from shareholder David Iles, who holds an 11.9 per cent stake in the company, to fund all three projects.

The first project, for one turbine to be placed on a farm called Hammer on the island of Westray in the Orkneys, is ready to proceed subject only to finance, Kelly said. The total loan needed from Iles would be £1,115,000.

A second project in Shetland, near the main town of Lerwick, has been granted planning permission for a single Windflow 500 turbine. It would cost £1,120,000, of which £645,000 would be funded by a loan from Iles.

The third proposal before shareholders is a project in the Outer Hebrides, in conjunction with the North Harris Community Trust, which owns the land. Planning permission has been granted for three Windflow 500 turbines, with a total loan of £1,070,000 needed from Iles.

There are currently 16 other UK projects for individual turbines in the company's pipeline, Kelly said.

These projects are either well advanced through the planning and grid connection processes, or "with very good prospects for the future", he said.

Windflow UK (WUK), a wholly owned subsidiary of the company, was said to be working on another 20 UK turbine sale prospects.

"The largest cluster of projects is in the Orkney Islands, and there are also projects on Shetland, the Outer Hebrides and the Highlands," Kelly said.

"While the directors cannot be certain that these sales will materialise, they are confident that there is a good pipeline, that the UK market is the company's best immediate prospect for sales."

Kelly told shareholders that progressing with the first three projects would be "the best way to realise the pipeline of sales prospects".

The Christchurch-based company has also asked shareholders to accept a fourth resolution, the approval for its director to substitute any or all of the three projects with alternatives "if such substitution is warranted to expedite or improve the viability of the overall loan arrangements".

Shareholders will vote at a special meeting in Christchurch on Wednesday July 4.

The company has in the past stated its aims of licensing its intellectual property internationally and continuing to meet its maintenance and warranty obligations for Te Rere Hau wind farm in the Tararua Ranges.

It has also staked a commitment to continuing its market presence in the UK "in the expectation that orders in at least modest volumes will be forthcoming".

Windflow Technology shares were trading today at $0.240 on the NZX Alternative Market (NZAX).