US investors benefit Windflow shareholders

Geoff Henderson says WindFlow Technology should now have improved access to new capital. Picture / Brett Phibbs

Wind turbine-maker Windflow Technology says the arrival of US investors is good news for shareholders and should mean better access to new capital.

American Depositary Receipts (ADRs) for Windflow have begun trading in the US, allowing investors from that company to put their money, indirectly, into the company.

Windflow chief executive Geoff Henderson said the company was thrilled that American investors could now invest through ADRs.

Windflow shareholders benefited from the scheme because it increased the liquidity of Windflow shares, he said. The benefit for the company was better access to investment capital for any future share issue.

Windflow is listed on the NZX's alternative exchange for smaller companies.

American Depositary Receipts are a way for US investors to put money into companies that are not listed on any US stock exchange.

A broker buys shares on the company's home exchange, puts them into a bank - in this case the Bank of New York - which issues the ADRs. US investors can then buy and sell the ADRs between themselves, without the need for the company to comply with strict US listing rules and obligations.

Windflow says the ADR programme also created the possibility of investment by institutions that were only permitted to buy US-based securities.

News of the ADR trading comes at an important time for Windflow, as its wind farm division, NZ Windfarms, is in the middle of an initial public offering (IPO) of shares.

It is raising up to $8 million to fund the first stage of building a windfarm on the Tararua Ranges near Palmerston North. It will use the new wind turbines built by its parent company, Windflow Technology.

Company chief executive Chris Freear said he had been pleased with interest in the IPO from local and overseas institutional investors.

He said investors were interested in NZ Windfarms because it allowed "direct access to the electricity market, its growth potential and because of its decision to use New Zealand made turbines".

The Windfarms' IPO closes on December 2.