German solar cell manufacturer Q-Cells has terminated its supply agreement with China-based silicon wafer manufacturer LDK Solar, accusing its erstwhile partner of failing to deliver on the contract as promised.
The move prompted an immediate counter accusation from LDK Solar, who said the German firm had requested that shipments be suspended as it attempted to address an oversupply of solar panels across the industry.
In 2008, the two firms signed a 10-year contract for the supply of the wafers - a key component in the manufacture of solar cells - which saw Q-Cells hand over $244.5m to LDK Solar as a prepayment before the first batches were delivered.
The agreement specified that LDK Solar would supply wafers to Q-Cells totalling 43,000 metric tons for the years 2009 to 2018, with 1,000 metric tons to be delivered in 2009.
Q-Cells said in a statement yesterday that LDK solar did not fulfil 'significant contractual obligations', claiming it has not delivered the silicon wafers it had promised in 2009.
LDK Solar vigorously denied the accusation, stating that deliveries were made as promised in the first quarter of this year, but were then suspended at the request of Q-Cells in March as the two companies looked to renegotiate the contract.
LDK, whose shares fell 20 per cent yesterday on news of the termination, also said it has the wafers waiting to be shipped should Q-Cells want them.
'LDK Solar firmly believes it has performed substantially on all its obligations under the supply agreement,' the company said in a statement. ' This termination is without any valid basis.'
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