Nov. 2, 2009 (PR Newswire) --
XINYU CITY, China and SUNNYVALE, Calif., Nov. 2 /PRNewswire-FirstCall/ -- LDK Solar Co., Ltd. (NYSE: LDK), a leading manufacturer of multicrystalline solar wafers, today commented on Q-Cells SE's announcement of its unilateral termination of the solar wafer supply agreement concluded with LDK Solar in December 2007. In its announcement, Q-Cells has claimed that LDK Solar has not fulfilled significant contractual obligations under the supply agreement. LDK Solar vigorously disagrees with Q-Cells' claims.
During rounds of discussions and negotiations, LDK Solar has clearly stated to Q-Cells that it has not only procured feed stock for the manufacturing of the solar wafers under the contract, but has also manufactured the requisite quantities of the solar wafers ready for shipment to Q-Cells at its indication of willingness to accept. LDK Solar made deliveries during the first quarter of 2009 pursuant to purchase orders of Q-Cells under the supply agreement. Subsequent to March 2009, LDK Solar suspended deliveries at the request of Q-Cells in order to engage in various negotiations with Q-Cells in the interest of reaching a mutually agreeable amendment to the supply agreement. During the negotiation process, Q-Cells unilaterally claimed, and has now publicly announced, the termination of the agreement. LDK Solar believes this termination is without any valid basis.
The supply agreement provides for LDK Solar to supply solar wafers to Q-Cells on the basis of contractually fixed amounts of polysilicon totaling 43,000 metric tons for the years from 2009 to 2018, with annual wafer supply quantity for 2009 set at 1,000 metric tons at fixed prices under the supply agreement. At the beginning of 2008, Q-Cells made a prepayment of $244.5 million pursuant to the supply agreement. LDK Solar has also provided a bank guarantee in the same aggregate amount to guarantee the performance of its obligations relating to such prepayment under the supply agreement. LDK Solar firmly believes that it has performed substantially on all of its obligations under the supply agreement, and is ready to perform the additional obligations under the agreement that are currently contingent upon cooperation of Q-Cells, such as its willingness to accept the additional deliveries of LDK Solar's solar wafers pursuant to the supply agreement. Q-Cells has indicated in its announcement that it may draw down from LDK Solar's bank guarantee, and LDK Solar believes that such drawdown, if made, constitutes a wrongful drawdown under the supply agreement and violates the purpose of such bank guarantee.
