A rift has been healed between listed developer New Zealand Windfarms and turbine manufacturer Windflow Technology, averting court action which could have threatened the companies' viability.
Windflow was owed $4.1 million by Windfarms for 32 turbines, with the pair in dispute over European certification standards, but Windfarms had yesterday paid the manufacturer $1.8 million on payments withheld since mid-August - about 44% of the total debt.
Craigs Investment Partners broker Peter McIntyre said "common sense" had prevailed between the companies and the payment would avert a further liquidity crisis for Windflow.
Windflow was originally spun off Windfarms in October 2005.
Shares in Windflow were down 4% at $1.15 yesterday, while those of Windfarms remained unchanged at 40c.
The pair were co-dependent on one another, with Windfarms looking to complete its 65-turbine Te Rere Hau project near Palmerston North, while Windflow's major customer for its 30m-high two-bladed turbines was Windfarms.
Windflow has discontinued initiating High Court proceedings and is continuing efforts to resolve the contractual issues and is seeking payment of the outstanding $2.3 million.
Mr McIntyre said with top-10 listed energy company Vector a 20% shareholder of Windfarms, the withholding payment was a "shot across the bow" to Windflow to ensure it met European certification standards in the future.
