Search sponsor
Financially constrained PV manufacturers are advised to look at alternative ways other than relinquishing hard-to-find cash to end wafer supply deals with suppliers after a long-standing dispute between Conergy and MEMC was partially resolved via old-fashioned bartering.
A wafer supply deal between the companies was originally signed in October 2007 that was intended to last until 2018 on a then typical take or pay contractual basis valued at around US$600 million.
However, Conergy’s financial situation led to major restructuring that included a focus on module production at its state-of-the-art facility in Frankfurt Oder negating the need for bare-wafers.
As has been the norm, MEMC said that with the agreement to terminate the wafer supply contract, Conergy will lose its US$21.2 million letter of credit facility, used to secure production capacity allocation and also make payments on outstanding payables to the tune of US$5.5 million.
However, further securities provided by Conergy under the wafer supply agreement from Commerzbank AG totalling approximately US$29.5 million are to be returned to Conergy again after consummation of the agreement.
Yet the amount involved and the duration of the original contract would seem to have remained a stumbling block in efforts by MEMC to recoup full financial commitments undertaken by Conergy.
This may have led to what was only revealed in the MEMC statement over the contract termination that the wafer producer would also receive the transfer of Conergy's portfolio of PV power plant operations and maintenance agreements in Germany, Italy and Spain.
According to MEMC the deal equated to 175MW of operating plants, which would make it logical for MEMC to accept as payment having become one of the major PV project developers, via its acquisition of SunEdison.
Although not stated, under the business model of MEMC/SunEdison these PV power plant assets would eventually be put up for sale, should the deal be consummated.
