LDK Solar Comments on Dispute With Q-Cells Relating to Q-Cells' Termination of
XINYU CITY, China and SUNNYVALE, Calif., Nov. 2
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.
While the Regional Court of Berlin, in preliminary proceedings LDK Solar
instituted in August 2009, initially prohibited Q-Cells from drawing down from
LDK Solar's bank guarantee, it subsequently lifted the injunction in view of
the nature and purpose of a bank guarantee, without deciding whether the
termination by Q-Cells was valid and instead leaving the issue to be
determined in the arbitration proceedings.
LDK Solar intends to vigorously defend its rights and interests as a result of
Q-Cells' wrongful termination of the supply agreement, breach of the supply
agreement and wrongful drawdown from our bank guarantee, including the
contractually provided arbitration yet to start at the International Chamber
About LDK Solar (NYSE: LDK)
LDK Solar Co., Ltd. is a leading manufacturer of multicrystalline solar
wafers, which are the principal raw material used to produce solar cells. LDK
Solar sells multicrystalline wafers globally to manufacturers of photovoltaic
products, including solar cells and solar modules. In addition, LDK Solar
provides wafer processing services to monocrystalline and multicrystalline
solar cell and module manufacturers. LDK Solar's headquarters and
manufacturing facilities are located in Hi-Tech Industrial Park, Xinyu City,
Jiangxi Province in the People's Republic of China. LDK Solar's office in the
United States is located in Sunnyvale, California.
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of
the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. All statements other than statements of historical fact in this press
release are forward-looking statements, including but not limited to, LDK
Solar's ability to raise additional capital to finance its operating
activities, the effectiveness, profitability and marketability of its
products, the future trading of its securities, the ability of LDK Solar to
operate as a public company, the period of time during which its current
liquidity will enable LDK Solar to fund its operations, its ability to protect
its proprietary information, the general economic and business environment and
conditions, the volatility of LDK Solar's operating results and financial
condition, its ability to attract and retain qualified senior management
personnel and research and development staff, its ability to timely and
efficiently complete its ongoing construction projects, including its
polysilicon plants, and other risks and uncertainties disclosed in LDK Solar's
filings with the Securities and Exchange Commission. These forward-looking
statements involve known and unknown risks and uncertainties and are based on
information available to LDK Solar's management as of the date hereof and on
its current expectations, assumptions, estimates and projections about LDK
Solar and the solar industry. Actual results may differ materially from the
anticipated results because of such and other risks and uncertainties. LDK
Solar undertakes no obligation to update forward-looking statements to reflect
subsequent events or circumstances, or changes in its expectations,
assumptions, estimates and projections except as may be required by law.
SOURCE LDK Solar Co., Ltd.
Contact: Lisa Laukkanen of The Blueshirt Group, +1-415-217-4967,
email@example.com, for LDK Solar; or Jack Lai, Executive VP and CFO of
LDK Solar Co., Ltd., +1-408-245-8801, IR@ldksolar.com
Press spacebar to pause and continue. Press esc to stop.