An alternative energy company in North Vernon hopes to have most of its workers back on the job over the next several weeks.
Dan Bates, CEO and founder of Windstream Technologies, told members of the North Vernon City Council his hopes and plans during the council’s meeting Monday night. The company, which manufactures wind turbines, opened its plant in the city in 2011.
Part of that plan, Bates explained, is the acquisition of additional capital through new investment. He added that the lack of investment, along with decreased demand for the company’s products, has resulted in much of the Windstream workforce being laid-off. When City Councilman Jack Kelley pressed Bates for numbers, the CEO said that eight to 10 employees are on the job now, down from the 35 recently working.
As part of the move to North Vernon, the company received a 10-year, $1.4 million loan from the city, through its Redevelopment Commission and Tax-Increment Financing funds. Since the loan was issued, repayments to the city have been irregular. Shawn Gerkin, North Vernon Clerk-Treasurer, says that the money the city has received has essentially been enough to cover the interest payments, leaving the $1.4 million balance largely intact. Part of the loan agreement includes a scheduled balloon-payment of several hundred-thousand-dollars, which is due in late-August.
Bates explained to the council that the balloon-payment was part of the problem in getting Windstream’s financial house in order. He said that he is working with a law-firm out of Raleigh, N.C. to restructure the company. Bates said that the payment due in August, along with the company’s stock price, is making it difficult to attract investors. Bates said that, while investors like the products being manufactured, they get spooked when they learn about the company’s financial situation. He went on to say that the North Carolina law-firm has a track record in helping companies in similar positions. Bates added that the immediate goal is to restructure and make Windstream “look presentable” to investors, adding that the company’s stock price does not accurately reflect the financial health of the business.
While not directly stating that the company will be unable to make the balloon-payment, it was alluded to enough that council members discussed the possibility of postponing it. That, after Bates suggested that a delay of up to two years would give his company ample time to take the steps needed to correct its course. Council members agreed that they would need to discuss the issue with the Redevelopment Commission before any possible changes to the loan agreement could be implemented.
Bates told the council that he understood and thanked the members, and the city as a whole, for their patience. He said that, while the loan repayment hasn’t gone as he has liked, Windstream Technologies has been an economic positive for North Vernon and all of Jennings County. Bates said that since the business opened locally, over $9 million in business has been done locally, counting property taxes, payroll and payments to vendors.
Bates went on to say that he wants to honor the agreement and do right by the council and the city. He says that he has been rejecting calls from advisors to file Chapter 11 bankruptcy. Bates added that the company has every intention of meeting its obligations, but he needs a little more help from the city.