CWP Clipper Reg S

 

TIDMCWP 
 
RNS Number : 3718R 
Clipper Windpower Plc 
20 August 2010 
 

CLIPPER EXECUTES DEFINITIVE PRODUCT WARRANTY AGREEMENTS WITH UNITED TECHNOLOGIES 
CORPORATION 
 
London (UK), Carpinteria, CA (USA) - August 20, 2010.  Clipper Windpower Plc 
("Clipper" or the "Company") has completed execution of definitive agreements 
with respect to product warranty support from United Technologies Corporation 
("UTC"). 
The agreements create the legal framework for UTC to provide guarantees of 
warranty obligations for new sales of Clipper's Liberty wind turbines.  The 
issuance of any warranty guarantees will be on an individual basis and at the 
sole discretion of UTC.  The Company's Board has been informed by UTC that the 
aggregate maximum liability of UTC and its affiliates pursuant to the warranty 
guarantees is in the region of $500 million, although this amount may be 
increased or decreased by UTC from time to time in its sole discretion.  For 
each UTC guarantee issued, Clipper will pay UTC an annual fee of 1% of the 
maximum liability under the guarantee for each of the first two years of the 
guarantee and 1.5% of such amount for each subsequent year of the guarantee. 
 
Clipper will continue to complete all warranty obligations under the terms of 
each customer agreement. In the event Clipper does not satisfy an obligation and 
any payment is made by UTC to customers under a guarantee, Clipper will be 
obligated to reimburse UTC for such payments, with interest accruing at a rate 
of Libor plus 5%. 
 
In consideration for the provision of this support from UTC, Clipper will grant 
UTC a security interest in the assets of both Clipper and Clipper Windpower, 
Inc., together with an option for UTC to subscribe for new ordinary shares 
representing approximately 5% of the outstanding shares of Clipper, in each case 
enforceable by UTC only in the event of a Clipper default under the agreements. 
If the reimbursement amount owed to UTC is less than $100 million, Clipper will 
have six months to repay the amount before a payment default would occur. 
 
These arrangements with UTC are conditioned upon approval of the shareholders of 
the Company, and a circular convening a general meeting will be sent to 
shareholders within the next week.  Due to the related party nature of these 
agreements, UTC will not vote on the resolution. The circular will contain a 
more detailed summary of the terms and conditions of the agreements, including 
the events of default which could trigger enforcement of the security and 
exercise of the option, and will also contain an explanation on why the Board 
believes that entering into these arrangements with UTC is in the best interests 
of shareholders. 
 
The Company expects that the guarantee support under these agreements will: 
 
·     enhance the Company's ability to obtain new orders for turbines by 
providing increased confidence to customers and their project finance 
institutions regarding the Company's ability and credit strength to fulfill its 
warranty obligations; 
·     strongly position the Company to pursue a broader range of sales 
opportunities available in global wind markets; and 
·     allow shareholders to continue to participate in the positive development 
of the Company, sharing in the potential upside from an anticipated market 
recovery and the expected resulting growth in the Company's operations. 
 
UTC presently owns approximately 107.1 million Ordinary Shares representing 
approximately 49.9% of the entire issued share capital of the Company. UTC is 
therefore a substantial shareholder of the Company and considered to be a 
related party under the AIM Rules for Companies (the "AIM Rules").  The entering 
into the arrangements described in this announcement is classified as a related 
party transaction for the purposes of the AIM Rules. Accordingly, in approving 
execution of these agreements with UTC, the directors of the Company, other than 
those nominated by UTC, having consulted J.P. Morgan Cazenove, the Company's 
Nominated Advisor, believe that the terms of these arrangements with UTC are 
fair and reasonable insofar as all shareholders are concerned. 
 
This press release contains statements about the Company that are or may be 
forward looking statements. All statements other than statements of historical 
facts included in this press release may be forward looking statements. Without 
limitation, any statements preceded or followed by or that include the words 
"targets," "plans," "believes," "expects," "aims," "intends," "will," "may," 
"anticipates," "estimates," "projects," or words or terms of similar substance 
or the negative thereof, are forward looking statements. Forward looking 
statements include statements relating to the following: future capital 
expenditures, expenses, revenues, earnings, synergies, economic performance, 
indebtedness, financial condition, losses and future prospects, business and 
management strategies and the expansion and growth of the Company's operations 
and potential synergies between the Company and UTC. 
 
Such forward looking statements involve risks and uncertainties that could 
significantly affect expected results and are based on certain key assumptions. 
Many factors could cause actual results to differ materially from those 
projected or implied in any forward looking statements. Due to such 
uncertainties and risks, readers are cautioned not to place undue reliance on 
such forward looking statements, which speak only as of the date hereof. The 
Company disclaims any obligation to update any forward looking or other 
statements contained herein, except as required by applicable law. 
 
All subsequent written and oral forward looking statements attributable to the 
Company or persons acting on the Company's behalf are expressly qualified in 
their entirety by the cautionary statements above. The forward looking 
statements included herein are made only as of the date of this press release. 
The Company does not intend, and does not undertake any obligation, to update 
these forward looking statements. 
 
About Clipper 
 
Clipper Windpower Plc, www.clipperwind.com, is a company engaged in wind energy 
technology, turbine manufacturing, and wind project development.  The Company 
designs advanced wind turbines, manufactures its 2.5 MW Liberty wind turbine, 
and actively develops wind power generating projects in the Americas and Europe. 
Clipper's headquarters are in Carpinteria, California, USA.  The Company's 
330,000 square foot manufacturing and assembly facility for land-based wind 
turbines is located in Cedar Rapids, Iowa; its development center for offshore 
wind turbine development is located in Blyth, UK.  Clipper is a public company 
listed on AIM of the London Stock Exchange. Clipper's ticker symbol is CWP. 
 
The ordinary shares of Clipper Windpower Plc are traded on AIM of the London 
Stock Exchange and are not registered under the U.S. Securities Act of 1933, as 
amended. Such shares may not be offered or sold to residents of the United 
States or to persons acting on their behalf, or to other persons who are "United 
States Persons" within the meaning of Regulation S as promulgated under the 
Securities Act of 1933, unless such shares have been registered under the 
Securities Act or there is an available exemption from registration. 
 
### 
 
For further information, please contact: 
 
INVESTORS 
Clipper Windpower Plc 
Jenny Matthews 
Investor Relations 
Tel: +44 (0)7827 259495 
 
J.P. Morgan Cazenove(Nominated Adviser and Corporate Broker to Clipper) 
Patrick Magee / Jamie Riddell 
Tel: +44 (0)20 7588 2828 
 
FINANCIAL PRESS 
M:Communications 
Patrick d'Ancona / Charlotte Kirkham 
Tel: +44 (0)20 7920 2347 
 
BUSINESS AND TRADE 
Mary Gates 
Director, Global Communications 
+1 661 301 0400 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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