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NZ Windfarms seeking a 'commercial resolution'

Windflow and NZ Windfarms are both downplaying the latest Stock Exchange report that highlights “fundamental uncertainty” for the unique twin bladed turbine operator.Wind farm operator NZ Windfarms,has a dispute with manufacturer, Windflow, ab

Chris Hutching
Tue, 02 Mar 2010

Windflow and NZ Windfarms are both downplaying the latest Stock Exchange report that highlights “fundamental uncertainty” for the unique twin bladed turbine operator.

Wind farm operator NZ Windfarms,has a dispute with manufacturer, Windflow, about the certification process for the turbines and blames this on a delayed but essential capital raising.

NZ Windfarms claims it has been delivered some turbines that have different specifications from those being built to international IEC Certification specifications.

The latest half year announcement also reports some engineering problems in certain turbines that have been rectified.

The auditors’ “fundamental uncertainty” tag directly affects manufacturer Windflow because NZ Windfarms is its sole customer.

NZ Windfarms chief executive officer, Stephen Cross, told NBR that such disputes “usually have a commercial resolution”, indicating that his company regards financial compensation as crucial to clear the way for the necessary capital raising. The certification issue is material for the company’s bankers, he said

Mr Cross said that the information issued to the Stock Exchange is essentially the same as sent to shareholders in December – that the company does not have sufficient operating cashflows for the coming year. The capital raising via a rights issue is progressing, Mr Cross said.

NZ Windfarms has commissioned the 65 turbines at the Te Rere Hau wind farm and has obtained resource consents for another 56 on adjacent land but it is subject to an Environment Court appeal. But commissioning the turbines at Te Rere Hau and fixing the engineering problems means the company posted a $6.5 million loss for the six months ending December.

On the bright side, Mr Cross said the problems besetting NZ Windfarms regarding specifications of individual turbines has been crystalised in an independent consultant’s report.

Windflow’s chief operating officer, Tom Hooper, maintained that the problems reported in the latest NZ Windfarms report are largely historical. Windflow says it was never contracted to supply IEC Certification turbines to NZ Windfarms.

“The two companies have fundamentally different views on the IEC Certification status.”

However, IEC Certification is essential for Windflow’s future sales, particularly overseas. Mr Hooper said an announcement in two weeks would provide an update on the process.

Chris Hutching
Tue, 02 Mar 2010
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NZ Windfarms seeking a 'commercial resolution'
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