Windlab has announced that it has secured access to necessary funds to manage liquidity through any future project delays including its landmark Kennedy Energy Park, Australia’s first project on a major grid to combine wind, solar and battery technologies. The developer secured the $20 million loan from private equity investor Federation Asset Management and Squadron Wind Energy Development, owned by Andrew Forrest’s Minderoo Group.
Earlier in March, the two firms made a $1 per share takeover offer for Windlab valued at around $70 million, which remains subject to shareholder approval. The loan was promised as part of the takeover proposal for a period of three years.
Windlab has suffered a $30 million write-down on the Kennedy project following 18 months of connection delays. The write-down was revealed after adjudication by a Queensland construction commission ruled that Windlab will be the sole party to bear the costs of delays at the Kennedy Energy Park. The developer was ordered to pay the EPC contractor an outstanding $7.5 million in project milestone payments, but the parties have agreed to try to resolve the claims outside of the courtroom.
Construction of the Kennedy hub – combining 43 MW of wind, 15 MW of solar and a 2MW/4MWh Tesla battery – was completed in December 2018. The project located east of Hughenden in Queensland was energized in August last year but its commercial operation has been delayed due to complications in the connection process.
Faced with liquidity stress, the Windlab board said they examined alternative approaches for rising capital and determined that the loan “was on most favorable commercial terms and is fair and reasonable from the perspective of Windlab shareholders”. The loan is not dependent on the outcome of the shareholder voting on the consortium’s takeover proposal.
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