Windflow sorts $21m debt, agrees to Gebbies Pass turbine conditions

Wednesday, 23 August 2017

Geoff Henderson, founder of Windflow, says the future lies with the company's intellectual property.

Twin blade wind turbine electricity generator Windflow has struck a deal to repay its $21 million debt to major shareholder David Iles.

In another development, the company also been ordered to pay costs in an Environment Court ruling about conditions to run its turbine at Gebbies Pass near Christchurch.

The view from the top of Widnflow's Gebbies Pass turbine, which was dismantled about a year ago until operating conditions were agreed.

The deal with Iles involves handing him ownership of Windflow's six turbines in the UK, and converting his preference shares to ordinary shares, lifting his stake in Windflow from 42 per cent to 73 per cent.

Founder and managing director Geoff Henderson said he would send out a notice of a special meeting to be held in October or November to ratify the arrangements.

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Repayments on the loan were due to begin in September based on a 22 per cent interest rate.

Speaking from China, Henderson said the meeting would also provide an opportunity to discuss the future of the company.

He said he had been talking with Chinese authorities and businesses about the company's synchronous gearboxes, which have advantages in smoothing out power surges such as the ones affecting South Australia last year.

Commercialising Windflow's intellectual property was a likely way forward for the company, he said.

Meanwhile, a recent Environment Court ruling has ordered Windflow to pay $10,815 to Luke Pickering, a neighbour of the company's turbine at Gebbies Pass.

Henderson said the turbine had been dismantled for about a year and he had yet to decide to recommission it.

It earned about $70,000 a year and had value as a demonstration of the company's turbines.

The ruling said Windflow had spent 'well in excess' of $100,000 on the dispute.

Pickering had challenged and obtained tighter conditions on Windflow's resource consent to operate at Gebbies Pass.

Christchurch City Council was ordered to pay Pickering $3600.

Windflow and the city council had argued they were the successful parties in the dispute, which was resolved when Windflow acceded in mediation to tighter conditions including operating the turbine for fewer hours at night and when wind reached a certain velocity.

'I do not consider the appellant (Pickering) unsuccessful in this proceeding; indeed the converse is true,' Environment court judge Jane Borthwick said.

Turbine noise was the dominant noise in McQueen's Valley below Gebbies Pass, she said.

'The turbine noise is clearly audible above background sound, even though the level of turbine noise does not exceed the guideline limits in the New Zealand Standard.

'Its (character and) unpredictability has had an adverse effect on general enjoyment of the properties and for some disturbed their sleep.

'Windflow's and the City Council's assumption that the effect of noise below the guideline limits is acceptable was inimical to an enquiry into the actual experience of noise within McQueen's Valley.

'The Council engaged an independent expert on the topic of noise. The public's interest is at the forefront of the Council's role but it did not make enquiry into the actual experience of turbine noise within McQueen's Valley.

'The Council did not appreciate that the New Zealand Standard is a guideline and instead relied on its expert's advice that the effect of noise below the guideline levels in the Standard is always acceptable, Judge Borthwick said.

The total $14,420 that Windflow and the council were required to pay was about three quarter's of Pickering's actual costs.