AMSC to receive $57.5M in settlement with Sinovel Wind Group
AMSC announced that it and Sinovel Wind Group Co. have entered into a settlement agreement to resolve all existing commercial disputes between the parties. Under the terms of the settlement agreement, Sinovel has agreed to pay AMSC an aggregate cash amount of $57.5M, consisting of two installments. Sinovel has agreed to pay AMSC the first installment of $32.5M by July 5, and has agreed to pay AMSC the second installment of $25M within 10 months after the U.S. District Court delivers the first sentence against Sinovel, which is expected to occur on July 6. Wenyuan Wei, former Sinovel chairman and a current Sinovel shareholder, has delivered a letter of guarantee to AMSC for the second payment should Sinovel fail to make such payment by the second payment due date. In addition, pursuant to the terms of the settlement agreement, AMSC and its wholly-owned Austrian subsidiary, AMSC Austria GmbH, have granted Sinovel a non-exclusive license for certain AMSC intellectual property to be used solely in Sinovel's doubly fed wind turbines. In the event that Sinovel or Mr. Wei does not make the second payment by the due date, the agreement provides that the non-exclusive license will terminate. AMSC and Sinovel have also agreed to submit withdrawal applications to terminate the various legal proceedings between them, with the right to re-file, to the relevant Chinese courts and the Beijing Arbitration Commission. In addition, AMSC and Sinovel have agreed to a mutual release covering all subject matters of the commercial disputes, effective upon the completion of the second payment.