NZ Windfarms announces financial close of $17.3m major acquisition - Powerco
assets
29 September 2017
NWF today advises it has completed the purchase of significant transmission
assets at its Te Rere Hau Wind Farm near Palmerston North as planned. The
company previously leased the assets from lines company subsidiary Powerco
Transmission Services Ltd.
Rodger Kerr-Newell, NZ Windfarms'' Chairman said, "The new board made a
commitment to shareholders at the 2016 AGM that effort would be focused in a
number of areas including addressing the lease and obtaining control of
assets critical to the company''s operations. We confirmed at the company''s
AGM earlier this week that closure was imminent. The acquisition provides
control across both generation and transmission assets to the injection
node."
"We are delighted that we have been able to deliver on the promise to address
this lease and we continue to work on all the other initiatives that we have
outlined to shareholders," said Kerr-Newell.
Kerr-Newell noted, "This is fundamental to our strategy of returning cash to
shareholders, and contributes to our commitment at the AGM earlier this week
to make a maiden dividend announcement in coming weeks."
The company paid $17.3m for the assets, which include around 20km of dual
33kV transmission circuits, on-farm reticulation cabling, a switchyard, 97
transformers (one per turbine), relevant licenses and easements and other
ancillary assets and spares. The company has leased these assets for
approximately 7 years, with current lease costs of approximately $2.4m per
annum. CEO John Worth noted that the acquisition improves the company''s
cashflows by around $700k/annum. Shareholders voted at the Tuesday AGM in
favour of the acquisition and the establishment of a debt facility, provided
by the company''s bankers, Bank of New Zealand. The balance of the purchase
price was funded from company cash reserves freed up by the release of a bank
guarantee associated with the asset leases.
This acquisition will also positively affect NZ Windfarms asset value-in-use
test. The company will work through this and advise the result in due
course.
CEO John Worth notes that the Company has worked closely with Powerco''s
leadership team in the purchase and acknowledges Powerco''s commitment and
cooperation in executing the transaction as planned. "Getting this deal done
is another big tick item in improving NZ Windfarms'' fortunes. Five months
ago we set a target of getting this done by the end of September; that''s
exactly what we''ve done."
For further information contact:
John Worth
Chief Executive Officer
+64 21 800 310
End CA:00308035 For:NWF Type:GENERAL Time:2017-09-29 16:18:44