03 November 2009
XINYU CITY, China and SUNNYVALE, Calif., November. 2, 2009 -- LDK Solar Co., Ltd. (NYSE:LDK) , a manufacturer of multicrystalline solar wafers, today commented on Q-Cells SE's announcement of its unilateral termination of the solar wafer supply agreement between Q-Cells and LDK Solar. 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 discussions and negotiations, LDK Solar claims that it 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.
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 of Commerce.