MEMC terminates Conergy wafer supply agreement

MEMC terminates Conergy wafer supply agreement

5:29 AM, 26th September 2012
MEMC terminates Conergy wafer supply agreement

ST PETERS, US: MEMC Electronic Materials Inc’s subsidiary, MEMC Singapore Pte Ltd, have agreed with Conergy AG to terminate their long-term solar wafer supply agreement. For the supply agreement, originally signed in October 2007, MEMC was to supply solar wafers to Conergy pursuant to pre-set pricing over a 10-year period on a take or pay basis.

Since the market downturn in early 2009, issues with respect to Conergy’s price and volume purchase obligations have created challenges to finding a mutually beneficial arrangement between the parties, leading to a reduction in the size of the supply agreement in January 2010. In order to resolve these ongoing challenges, the companies have now agreed to terminate the supply agreement.

MEMC will receive payment of $21.2 million through the irrevocable letter of credit established by Conergy under the wafer supply agreement. MEMC will refund to Conergy the refundable capacity reservation deposit currently held by MEMC in an approximately equal amount.

Conergy will also make payments on outstanding payables in the amount of $5.5 million. In addition, Conergy has agreed to transfer to MEMC Conergy’s portfolio of operations and maintenance contracts covering solar power plants in Germany, Italy and Spain representing up to approximately 175 megawatts.

MEMC is assessing the financial impact of the termination of the supply agreement. “We are glad to have achieved a mutually beneficial outcome for both parties,” said Brian Wuebbels, Chief Financial Officer, MEMC.

© WOC News

 

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