North Coast Solar Stocks

November 11, 2009

Q-Cells says to draw bank guarantee in LDK row

Filed under: LDK — Tags: , , , , — Jason @ 7:40 am

Wed Nov 11, 2009 7:40am EST

* Q-Cells expects sum of $244.5 mln in next days

* Jiangxi court issued civil order to freeze payment -LDK

* Shares in Q-Cells gain as much as 4.9 pct

FRANKFURT, Nov 11 (Reuters) – German solar cell maker Q-Cells said it expects to recover a $244.5 million bank guarantee linked to its recently ended wafer supply contract with Chinese solar company LDK (LDK) within the next few days.

“Q-Cells has already started the draw-down process of the bank guarantee and expects the respective sum to be transferred within the next days,” the German company said in a statement.

Q-Cells, one of the world’s largest makers of solar cells, had made a prepayment of $244.5 million shortly after it signed the contract with LDK in late 2007, when wafer prices were much higher.

This prepayment, secured by a German bank, was reclaimed by Q-Cells last week after it said LDK did not fulfil “significant contractual obligations”.

A Q-Cells spokeswoman declined to identify the German bank.

Shares in Q-Cells rose as much as 4.9 percent after the news and were up 3.2 percent at 1159 GMT.

LDK Solar on Wednesday said a Jiangxi court had issued a civil order freezing any payment of guaranteeing banks, aiming at preventing them from returning the prepayment made by Q-Cells.

“The outpayment of the guaranteed sum by the German bank is … in no way affected by legal decisions in other jurisdictions such as China,” Q-Cells said in a statement.

Q-Cells last week said that an application by LDK for a temporary injunction against the drawing down of the bank guarantee had been rejected by a Berlin court.

“Currently Q-Cells is in negotiations with LDK to find a mutual solution for the existing differences,” Q-Cells said.

(Reporting by Christoph Steitz in Frankfurt and Ajay Kamalakaran in Bangalore; editing by Simon Jessop)

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