Q-Cells SE terminates supply agreement with LDK Solar

BITTERFELD-WOLFEN, GERMANY: Q-Cells SE has terminated the agreement concluded in December 2007 with the Chinese solar company LDK Solar for the supply of solar wafers, as LDK Solar did not fulfil significant contractual obligations.

The original agreement specified the supply of solar wafers on the basis of a contractually fixed amount of silicon totalling 43,000 tonnes for the years from 2009 to 2018, with wafer supplies on the basis of approximately 1,000 tonnes of silicon relating to 2009. At the beginning of 2008, Q-Cells made a payment of $244.5 million in the context of this agreement.

This payment can be reclaimed in the event of termination of the agreement and is secured by a bank guarantee at a German bank upon first demand.

The contractual parties have differing opinions concerning the validity of the termination of the agreement. Direct discussions between the two companies and a parallel arbitration process at the International Chamber of Commerce (ICC) in Paris have not resulted in an amicable settlement yet.

An application by LDK Solar for a temporary injunction to be issued against a drawing down of the bank guarantee was refused by the District Court in Berlin. Q-Cells will therefore make use of the possibility to draw down the bank guarantee linked to the payment made.