Windflow receives $1.8m after three month payment drought

A three-month stand-off between wind power companies Windflow Technology and NZ Windfarms has come to an end with NZ Windfarms paying almost half the amount it owes.

Windflow announced today it had received a $1.8 million payment from NZ Windfarms, the first since it started withholding payments in mid-August.

The amount owed to Windflow had swollen to $4.1 million by the time the payment was made, up from the $3.5 million confirmed by the company earlier this month.

NZ Windfarms is Windflow’s sole customer and refused to pay because of concerns over turbine certification and fitness for purpose of turbines provided by Windflow for NZ Windfarms' Te Rere Hau project near Palmerston North.

While the companies have still not fully resolved those issues, Windflow chief executive Geoff Henderson told NBR there should be further announcements in the next few weeks.

“The situation is still not completely resolved but we’re working through those issues now with NZ Windfarms and this payment shows we are making real progress.”

Mr Henderson said the High Court proceedings between the parties had been discontinued because of the payment and the two parties were making “continuing efforts” to resolve the outstanding contractual issues, including the rest of the owed money.

Windflow has been warning since September that it could face major cash flow issues if payment continued to be withheld.

But a resolution always appeared imminent and last week trading in Windflow shares on the NZX was suspended after the company’s application for a waiver for a late annual report was dismissed.

The company was delaying the report to account for pending expected announcements but quickly released its report to ensure the suspension was lifted.