Building up turbine production

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Fledgling Canadian wind turbine maker AAER Inc has delivered the first wind turbine from its Bromont, Quebec, plant to a customer in California. The 1.5 MW machine was shipped to the US Marine Corp Logistics Base in Barstow last month, a sale clinched in May 2008. "This is the first of four turbines that will be delivered to customers in the United States in early 2009," says AAER CEO Dave Gagnon. More are planned for delivery in the US, Canada and Europe in 2009 as turbine production steps up in Bromont.

In December, AAER raised C$4 million in a public offering. It says the money will be used to support its 2009 production. Specifically, it plans to buy moulds for the production of wind turbine machine cabins, make final payments for its purchases of tower-head components, as well as using a portion of the proceeds for general corporate and working capital purposes.

It sold 19.5 million share units for C$0.15 each, giving the buyer one common share and one warrant for the purchase of an additional common share for C$0.25 within 48 months. It also sold 1075 C$1000 convertible debentures maturing November 30, 2013, and paying 12.5% annual interest. The offering aimed to raise a minimum of C$4 million and a maximum of C$6 million.

AAER stock traded at a high of C$2.10 on the TSX Venture Exchange last spring, but tumbled after the company failed to win any contracts in Hydro-Quebec's call for 2000 MW of wind last year. Shares are now trading in the C$0.15 range. The company has a technology transfer agreement with German wind turbine designer and producer, Fuhrländer AG, and a license agreement to manufacture a turbine designed by American Superconductor Corporation's Windtec subsidiary, agreed in 2007. Windtec is based in Austria.

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