A Newburg manufacturer of small-scale wind turbines may be acquired out of bankruptcy by San Diego-based Helix Wind Corp. in an estimated $6 million deal that could eventually land the combined company in Oregon.
Helix (OTCBB: HLXW) on Tuesday said it has signed a non-binding letter of intent to acquire Abundant Renewable Energy LLC, the Newburg company that makes 2.5 kilowatt and 10 kilowatt wind turbines suitable for rural customers with at least an acre of land.
The purchase price will range between $4 million and $6.5 million in cash and restricted Helix stock. The closure of the deal is still contingent upon Helix completing financing by Nov. 1 and approval of the deal in U.S. Bankruptcy Court.
Abundant Renewable Energy filed for voluntary Chapter 11 bankruptcy protection in March. At the time, it said it had less than $500,000 in assets, between $1 million and $10 million in liabilities and between 100 and 200 creditors.
Jon Roschke, a customer support representative for Abundant, said the company is scheduled to present its reorganization plan — which includes the proposed acquisition — in bankruptcy court on Thursday.
Helix designs, manufactures and sells a variety of small wind turbines that range from 1kw to 300 watts.
CEO Ian Gardner said in the short-term Abundant — with about 10 employees — would continue to operate as usual. But Gardner said it’s possible that the bulk of Helix’s operations could end up in Oregon, citing the region’s abundance of engineering expertise.
“It’s certainly on the table,” Gardner said. “Certain members of our team are not opposed to relocating to Portland.”
Whether the company will host any manufacturing operations in Oregon is another question.
Abundant manufactures its own turbines on a small scale in Newburg, largely using parts made overseas, Gardner said. Helix, however, manufactures all of its turbines overseas and will eventually shift all manufacturing to Southeast Asia in an effort to keep costs down.
The company would consider manufacturing in Oregon if it finds an operation that meets standards and can compete with Southeast Asia on costs.
“The small wind market is becoming so competitive on cost, that getting a high volume on cost will be a determinant in being a success,” Gardner said.
Helix shares jumped 7 percent in Tuesday to $2.72 per share. It has traded between 1 cent and $60 per share in the past year.