International court orders AMSC to pay $11M
An international court has ordered energy technology manufacturer AMSC, of Devens, to pay $11 million to an Indian firm over an alleged breach of a licensing agreement, AMSC said Thursday.
An arbitration panel for the ICC International Court of Arbitration notified AMSC of its decision Tuesday, according to a statement from AMSC, formerly American Superconductor. The court found that AMSC’s wholly-owned subsidiary, AMSC Austria, breached its license agreement with Ghodawat Energy of India. The $11 million award covers damages and costs, including interest, according to AMSC.
AMSC said the case took four years since it was filed before the judgment was announced.
Despite the judgment, AMSC said it believes that it has enough money to satisfy the award, if required, and to fund its operations for at least the next year. AMSC said it expects to record a charge of approximately $10.5 million in its second fiscal quarter ending Sept. 30, 2014 for this award.
As a result of the decision, AMSC said it’s adjusting its net loss guidance for the second quarter to be just under $26 million, or 33 cents per share. That would be more than double the 16-cents-per-share net loss the company projected in its most recent quarterly report. In the first quarter, which ended June 30, the company lost 15 cents per share on revenue of $11.7 million, which was below analysts’ expectations of $12.4 million. AMSC also said it’s projecting lower revenue for its 2015 fiscal year, which ends next March.
However, the company said it’s focusing on “building the foundation required for growth in 2015 and beyond,” President and CEO Daniel McGahn said last month in a statement. He touted recent multi-million-dollar deals as signs of a potential turnaround. The deals include a $40 million order in June from Inox Wind Ltd. of India for wind turbine electrical control systems, and an agreement with the U.S. Dept. of Homeland Security that could be worth up to $60 million to build a superconducting cable system in and around Chicago.
Also last month, AMSC landed a $15 million order for wind turbine electrical control systems from Inox Wind Limited of India.
AMSC stock, which opened trading today at $1.71 a share on the Nasdaq exchange, plunged to as low as $1.57 within the first hour of trading before leveling off at $1.62 at midday.
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