Suntech to Pay MEMC $120 Million to Cancel Wafer Contract
Suntech Power Holdings Co., the world’s largest producer of silicon solar panels, agreed to pay MEMC Electronic Materials Inc. (WFR) $67 million and relinquish a $53 million deposit to cancel a 10-year wafer supply contract.
Suntech expects to incur expenses totaling $212 million to end the agreement, which was signed in 2006 when silicon wafer prices were higher than today, the Wuxi, China-based company said today in a statement. Ending the contract will save Suntech about $400 million on the purchase of 4,600 megawatts of solar wafers over five years.
MEMC, a silicon wafer manufacturer and solar power developer based in St. Peters, Missouri, did not disclose the financial impact of the agreement to end the contract.
Suntech’s American depositary receipts fell 12 cents to $7.75 each as of 8:22 a.m. in premarket trading on the New York Stock Exchange. MEMC slipped 14 cents, or 1.6 percent, to $8.39 a share.
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