Windflow Technology shareholders have approved the sale of more than $60 million of turbines to spin-off company New Zealand Windfarms.
Directors had urged investors to think carefully about the risks involved in the deal and had warned that multi-turbine failure could put Windflow into liquidation.
But shareholders voted unanimously in
support of the sale at the company's annual meeting on Wednesday night.
Windflow needed approval from investors to carry out the transaction, in which it plans to sell 66 of its turbines to Windfarms by the end of 2008 for Te Rere Hau wind farm near Palmerston North.
Windfarms also has the option of buying another 31 turbines from Windflow.
In the resolution discussed at the annual meeting, directors said the first batch of five turbines would be sold at $630,000 (excluding gst) each.
The turbines would have a five-year warranty.
Directors wanted shareholders to realise the frequency and size of any warranty claims would be the "major risk" for Windflow.
"If turbines do not operate to the required levels, compensation will be payable to the purchaser," the directors said.
"Given the profit on the transaction, a worst-case scenario of multiple turbine failure could put the company into liquidation."
Directors planned to take several measures to manage the risk, including staying with a staged development approach, offsetting warranties with back-to-back warranty arrangements with component suppliers where appropriate, and by "getting the engineering right by applying the lessons learned from the prototype" and completing international turbine certification.
Also at the meeting, investors approved Windfarms' proposed initial public offering of 10 million securities, each security being one ordinary fully paid share and one separately tradable option to subscribe to a share.
Windflow chief executive Geoff Henderson said the timing for the IPO had yet to be confirmed but would take place before the end of trading on September 29 next year.
- NZPA
