The company attributed the delay to problems with its largest customer, Sinovel Wind Group Co. of China, which since April has refused to accept contracted shipments of core electrical components and has refused to pay for shipments during the past year.
ASC had previously warned that its reported revenues for the last three-quarters of its financial year ended in March 2011 might have to be restated and that it was carrying out a review of internal controls over financial reporting.
It was due to file its annual 10K report to the US Securities and Exchange Commission by the start of June but on May 31 said it could not complete its financial statement in time and had requested an extension of 15 days. That deadline passed last week and the company gave no further indication of when the report might be filed.
Earlier today the company revealed that it received a letter on 17 June 2011 from the Listing Qualifications Department of the NASDAQ Stock Market advising it that due to its inability to file its Annual Report for the fiscal year ended 31 March 31 2011, the company is not in compliance with NASDAQ Listing Rule 5250(c)(1) for continued listing.
Industry analysts said American Superconductor’s problems throw light on the risk of over-reliance on a single customer. About three-quarters of ASC’s revenues came from Sinovel, China’s largest wind turbine manufacturer.
According to the Financial Times of London, the dispute with Sinovel represents an attempt to drive down the cost of the contract to the Chinese group, which is facing pressure from intense competition, tighter government regulation, and a marked slowdown in turbine demand in China.
The nation is now expected to install only 30,000 MW of new wind farms in the next two years compared to nearly 20,000 MW in 2010, the FT said.
But as difficult as the situation appears at the moment, analyst predict it will eventually be resolved because Sinovel is reliant on ASC’s parts and services.
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