Wave energy company which scooped a $7.2 million government grant collapses before making any money
Wednesday, April 2, 2014/
A company named by the United Nations as one of the top 10 renewable energy investment opportunities in the world has gone into receivership, after construction delays in the installation of a energy-producing unit off the coast of South Australia forced it to miss key installation deadlines.
Further funding was dependent on meeting these deadlines.
OceanLinx has been developing prototypes of wave energy technology since 1997, and had raised millions of dollars from investors, research organisations and bank funding. Most recently, it received a $7.2 million grant from the federal government’s Energy Renewables Program. SmartCompany understands it currently owes around $10 million to creditors.
Insolvency firm KordaMentha has been appointed as receivers of OceanLinx, following the appointment of Hall Chadwick as administrators.
The Sydney-based firm was in the process of installing what it claimed would be the world’s first 1MW single unit energy converter off the South Australian coast, which, when fully operational, has the capacity to power 100 homes.
This would have been the first money-earner for OceanLinx, which has been working on prototypes for much of its history.
However, construction delays caused by the tricky sea installation resulted in OceanLinx missing key deadlines, leading to delays in funding and a cash crunch. The company has six staff, who will remain employed “for the time being”.
A KordaMentha spokesman told SmartCompany the receiver’s immediate focus was to deal with the safety concerns posed by “a couple of huge bits of concrete floating off the coast of South Australia”.
“It’s not fully installed yet, and we’ll be working with the relevant authorities to ensure whatever needs to be done is done,” the spokesman said.
He was hopeful the company could be turned around.
“Clearly they have a nice piece of technology and were on the verge of earning some money. We’re going to see whether there’s a possibility to keep the company going to the revenue-earning stage. After all, a receivership doesn’t necessarily mean the end of the company”.
“It’s just a shame with the installation. The technology’s had some fairly impressive endorsements. [But] what happened a few weeks ago dried up the funding.”