Clipper Windpower Seeking Cash

Yesterday wind turbine manufacturer, Clipper Windpower released its interim results indicating that even though the company has seen significant improvement to its gross margins, it is seeking working capital to offset the volatility that it has experienced in its cash flow, according to Mike Keane, CFO.

In the first six months of the year, the company reported earning $154 million from the sale of 43 turbines.  In 2009, it reported selling 127 turbines with earnings of $357 million.  Keane wouldn’t disclose how many turbines the company has sold to date but he said that the company expects to complete the sale of 140 to 150 turbines by the end of the year, in line with expectations.

The company has experienced cash flow volatility, said Keane, “and anytime there is volatility there is risk.”  A deal with UTC would help. 

Some media outlets are reporting that Clipper is seeking a takeover from UTC, which owns a 49.5% stake in Clipper. UTC has the opportunity to increase its stake to 55%, according to Clipper, with UTC having submitted a new non-binding indication of interest to purchase the remaining issued shares at a significant premium to the September 23, 2010 market-trading price.

In its results announcement Clipper states: “The Directors have concluded that, in the absence of an acceptable binding offer for the remaining shares in the company by UTC, or agreement on another substantive new financing transaction at this time, the current business circumstances create a material uncertainty that casts significant doubt on the Group’s ability to continue as a going concern. Therefore the Group may be unable to realize its assets and discharge its liabilities in the normal course of business.”

Clipper says that discussions with UTC are ongoing, but there is no assurance the parties will reach agreement on a transaction that can be recommended to shareholders.

The wind market overall has been suffering from slower installations worldwide.  In April, RenewableEnergyWorld.com reported that installation figures for Q1 2010 at 530 MW, were the lowest since 2007.

 

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Jennifer Runyon
Jennifer Runyon has been studying and reporting about the world's transition to clean energy since 2007. As editor of the world's largest renewable energy publication, Renewable Energy World, she observed, interviewed experts about, and reported on major clean energy milestones including Germany's explosive growth of solar PV, the formation and development of the U.S. onshore wind industry, the U.K. offshore wind boom, China's solar manufacturing dominance, the rise of energy storage, the changing landscape for utilities and grid operators and much, much, more. You can reach her at Jennifer.Runyon@ClarionEvents.com Today, in addition to managing content on Renewable Energy World and POWERGRID International, she also serves as the conference advisory committee chair for DISTRIBUTECH, a globally recognized conference and expo for the transmission and distribution industry. In her role, she works in close cooperation with a large team of committed industry executives to shape the educational content for the event. She also helps assemble the renewable energy content for POWERGEN and helped launch the first Grid-Scale Storage Summit, a co-located event at HYDROVISION International. She has traveled to Germany to see onshore and offshore wind installations; Iceland to see geothermal energy in action; and France to see cutting-edge smart grids. In the U.S. she has visited and reported about bioenergy power plants in Florida, both large-scale and small-scale hydropower; and multiple wind farms, solar PV, and CSP installations. Formerly, she was the managing editor of Innovate Forum, an online publication that focused on innovation in manufacturing. Prior to that she was the managing editor at Desktop Engineering magazine. In 2008, she won an "Eddy Award" for her editing work on an article about solar trees in Vienna. In 2010, RenewableEnergyWorld.com was awarded an American Business Media Neal Award for its eNewsletters, which were created under her direction. She holds a Master's Degree in English Education from Boston University and a BA in English from the University of Virginia.

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