Pirelli-AMSC update HTS alliance
Revised agreement provides open access to AMSC's HTS wires for power cables worldwide
Westborough, Mass., February 26, 2002 - American Superconductor Corporation (Nasdaq:AMSC), a leading global supplier of superconductor products and power electronics for the electric power industry, and Pirelli Energy Cables and Systems, the world's largest power cable manufacturer, today announced a new agreement that allows AMSC to sell its high temperature superconductor (HTS) wire to other cable manufacturers around the world for power cable applications.
American Superconductor and Pirelli will continue to pursue - both together and separately - commercial HTS cable projects. According to Greg Yurek, chief executive of American Superconductor, " this new agreement significantly expands AMSC's addressable market for HTS wires for the power cable segment. We believe that access to this larger market will accelerate adoption of HTS power cables while driving higher sales of HTS wire."
Under terms of the new agreement, AMSC will pay Pirelli a one-time, license payment of $2.25 million, plus a royalty to Pirelli for any wire sold to other cable manufacturers. Furthermore, AMSC will grant Pirelli 50,000 shares of AMSC Common Stock, which Pirelli will hold until at least September 30, 2003.
The revised agreement also discontinues Pirelli's funding of research and development by AMSC. Under the previous agreement, Pirelli provided AMSC with $500,000 per quarter in R& D funding. Pirelli will, however, continue its participation in AMSC's multifilamentary composite wire product development programs through September 2003.
" The decade-long relationship between Pirelli and American Superconductor was instrumental in helping us develop HTS wire into a commercial product," said Yurek. " Now that this goal has been accomplished, the benefits of making the world's highest performing HTS wire available to the global market of power cables are clear to both Pirelli and AMSC. By selling our wire to more cable manufacturers for use in an array of demonstration and commercial cable projects, we believe we will speed the transfer of this critical technology into the marketplace."
" Pirelli, a recognized leader in the development of HTS technology, has agreed with its strategic partner AMSC that the time is ripe to make state-of-the-art AMSC HTS cable wire widely available in the marketplace," said Fernando Gonzalez, vice general manager of Pirelli Energy Cables and Systems. " This initiative, combined with the ongoing search for concrete applications in utility networks, is expected to encourage further development efforts and lead to a broader and faster adoption of HTS cable technology."