New Zealand

New Zealand

Experiment heads for US stock market

Vortec Energy of New Zealand, the developer of an unusual prototype "diffuser augmented" wind turbine, is looking overseas for further financial support for the machine's development. The company recently floated two million 500 cent shares on the New Zealand market. While the investment community says the offer did better than expected, it was under subscribed, leading Vortec to target the much larger United States investment market.

New Zealanders do not traditionally have an appetite for speculative stocks, notes Vortec's Richard Locke. That, combined with the small size of the country's stock market, has meant that it was unlikely Vortec would reach its target within the New Zealand scene. This was recognised in the prospectus where it stated that the company would need funding resources "beyond the capability of the New Zealand investing public." The company is moving in the direction of an Initial Public Offering on the US Stock Exchange in the form of a NASDAQ listing.

The company had noted if the non-underwritten issue were to be under subscribed, then alternatives would be considered including "reducing the scale of operations so as to reduce funding requirements." The aim had been to raise funds to build two, 52 metre Vortec 20 wind turbines -- one in New Zealand and one in Australia.

Local investment has been strong enough for the company to continue with its programme for the time being, but further funds will be needed to support the development of the planned full scale turbines. Locke is confident that interest shown from leading US investment banks and other overseas contacts will see a strong uptake of Vortec shares in the future. "The US capital market is the place to be, certainly for new technology," he notes.

The Vortec has attracted a deal of broad publicity following the release of a slick marketing package, developed by a professional public relations company. But much of the marketing claims have been made at the expense of the established wind industry.

Publicity claims

In an article in Modern Power Systems, an international business magazine of the power equipment industry, the company claims the Vortec will be quieter than "conventional" wind turbines where "noise is radiated from the rotor tips" and will "require considerably less land." Furthermore, the Vortec does not "present the bird hazard of the rapidly moving blades of conventional turbines."

Other claims made to Modern Power Systems are that the Vortec is cheaper and requires less maintenance than today's commercial wind turbines. "Its squat profile fits in easily with rolling hill country," writes the magazine in a three page, illustrated article tagged "MPS Review." Introducing the article, the magazine writes: "This new design of wind turbine could lead to a major reduction in the cost of wind power."

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