Windfarms, Windflow stoush gets public airing
Windfarms, Windflow stoush gets public airing in tit-for-tat exchange
By Pattrick Smellie
Nov 3. (BusinessWire) - The deteriorating relations between New Zealand Windfarms Ltd (NWF) and its turbine supplier, Windflow Technology Ltd (WTL), are getting a public airing in a tit for tat exchange of statements to the stock exchange today.
NZAX-listed WTL advised the exchange late yesterday that it was threatening legal action against NZW, the only customer so far for its innovative, locally developed two-bladed turbine.
NWF responded this afternoon, describing the threat of a High Court hearing seeking judgement for withheld payments of more than $3.5 million to WTL as "an abuse of process" and asserting its right to set-off losses against amounts invoiced by WTL under its existing contract.
WTL had offered NWF access to an independent expert's report on the performance of the WTL turbines last Thursday, but not on acceptable terms.
NWF would need to be allowed to "appropriately inform the market of the conclusions in that report", chief executive Steve Cross said in a statement to the NZX. WTL says the report gave the turbines a clean bill of health, reduced the number of issues it had any concerns about, and found "no major issues".
It has not released the report to the NZAX at this stage.
WTL says "if NZW continues to withhold payments then WTL will need to take steps to preserve its remaining cash until NZW resumes payment".
That could include slowing down and potentially stopping production at the company's Christchurch manufacturing plant, where a further $20 million to $30 million of turbines are on order from NZW, WTL's chief executive Geoff Henderson told BusinessWire.
"We are making a world beating effort here," said Henderson. "To have it jeopardised like this is a huge learning experience for me as an engineer.
NZW began withholding payments for the two-bladed turbines in August, claiming that it had been a condition of sale that the turbines would have International Electricification Commission certification. The WTL turbines have undergone design modifications as they were developed, meaning that the turbines currently being supplied to NZW's Te Rere Hau development in the Manawatu differ from earlier versions.
WTL had "made efforts to reach a commercial resolution with Windfarms, including commissioning an independent expert review of the Te Rere Hau turbine design differences compared to the final design submission for IEC certification".