How much would AMSC settle for if given the option?
So lets say the court rules that they can proceed in court vs arb. and then Sinovel offers 80 million to cover outstanding orders, but admits no guilt and stops selling anything with AMSC code. Do you think AMSC would accept?
I would say whatever the cost to AMSC of unpaid deliveries and cost associated with cancelling contracts to suppliers already arranged to meet Sinovel's signed contracts is the minimum AMSC should ideally accept in a settlement. That figure is probably near $250M, but when we consider AMSC's situation.....$30M to $50M would be a good enough cash cushion to get AMSC to 2014 with little risk of running out of money. There current cash burn last quarter was $6M, but there was restructuring cost involved. They have $40M unrestricted cash, which would just be barely enough to last them at $5M a quarter until forecasted cash flow positive date. Another $40M would give AMSC a lot more breathing room, and not force them to sell stakes in Tres Amigas or Blade Dynamics. If given something in that range, AMSC maybe smart to take it. The odds of AMSC ever getting $1.2B even if they won the lawsuits is slim to none, I bet Sinovel would just declare bankruptcy. Much less, if the case is dragged out for years......who cares if they eventually win if AMSC is just a bankrupt entity with creditors pursuing the lawsuit?
A while back I would think $200m would be the lowest they would accept. But Sinovel is in trouble on many fronts as AMSC is painfully aware. At this point I think they would have to strongly consider walking away with almost anything. For example if they received a $30m settlement offer I could see them accepting it and couldn't fault them.