RedFlow adds Wotif.com's Graeme Wood as substantial shareholder

RedFlow Limited’s (ASX:RFX) zinc bromide flow batteries continue to draw notable shareholders with online accommodation booking site Wotif.com founder Graeme Wood becoming a substantial shareholder.

He invested $3 million in the recent $9.7 million share placement which also included $3.4 million to interests associated with director Simon Hackett.

The placement of 15 million shares will see Wood have a 5.2% stake in the company.

He is also a sub-underwriter to the fully-underwritten $6.4 million entitlement issue.

Wood is a successful Australian entrepreneur philanthropist and environmentalist who founded Wotif.com and donated $15 million to the University of Queensland’s Global Change Institute to investigate real world solutions to climate change food and energy security.

He is also a supporter of renewable energy.

“RedFlow is poised to profit from the global demand for energy storage driven by the relentless growth of renewable energy technologies” Wood said.

Chairman Howard Stack welcomed Wood’s investment:

“It is very pleasing to have Graeme as a shareholder. His passion about climate change and practical steps which will limit emissions particularly through ambitious programmes to shift energy generation to renewables sits perfectly with our focus on integrating our energy storage products with renewable energy generation large and small.

“Integration with renewables and a change in the way energy is distributed requires new and efficient energy storage technologies and we are well placed to provide this.”


Capital Raising

RedFlow is raising $16.1 million through a $9.7 million placement and a fully underwritten 1 for 9 non-renounceable entitlement offer to raise A$6.4 million.

The raising price of $0.20 represents a 20.8% discount to the 10-day VWAP to 11th March 2015.

Proceeds will be used to:

- Fund a higher level of inventory;
- Place demonstration systems of both individual batteries and containerised solutions in selected regions. These demonstration units will be available for immediate sale; and
- Invest in new machinery to facilitate higher volumes and reduce costs through automation of some key processes in manufacturing.


RedFlow sells first large scale energy storage system

Earlier in the year the company sold its first commercial large scale energy storage system to Base64 Pty Ltd.

The system is a 20ft shipping container modified to accommodate 60 ZBM3 battery modules providing up to 300kW and 660kWh of energy with a voltage output between 400V and 800V DC.

Delivery and installation is expected in June 2015.   

This system is well suited to commercial buildings where solar or other renewable energy sources can be integrated with larger scale energy storage.

The design of this commercial system once completed will be available to the company’s system integration partners at no charge.  

Base64 Pty Ltd is a company associated with Simon Hackett.

Key benefits of this system are a full DC architecture easy installation ability to be interfaced with a range of commercially available inverters and a DC voltage of between 440V and 800V and it is relocatable.

Target applications for this system are larger mini-grid applications grid support distributed generation and renewables integration.


Key Catalysts

- Converting trials currently underway in Australasia Africa Europe USA Central and South America and the Philippines to firm sales orders;
- Consolidate and focus on current geographic markets and opportunities with no additional regions to be added unless in conjunction with existing system integration partner using existing product;
- Sales team in place in U.S. and Asia Pacific with Europe to commence from 1 April;
- Continuing focus on cost reduction in manufacturing with the sharing of cost savings an incentive for manufacturing partner Flextronics;
- Ongoing product development focused on improved performance lower cost and ease of manufacturability.


Analysis

The addition of Wotif.com founder Graeme Wood to the company’s register as a substantial shareholder provides an additional bullish signal to investors.

His entry further highlights the opportunity in the energy storage market which is within RedFlow’s grasp as it looks to make sales in 2015.

The energy storage market is estimated to have a potential of US$114 billion by 2017 of which zinc-bromide flow batteries could have a 19% market share - this equates to a US$21 billion opportunity.

Solar integrated storage alone is forecast to be €15 billion by 2020.

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