July 11, 2008
MEMC and Conergy Amend Solar Wafer Supply Contract
MEMC Electronic Materials, engaged in the manufacture and sale of solar wafers, and Conergy, a manufacturer of products for solar power generation, have amended their 10-year wafer supply contract.
The sales volume of the contract has been adjusted to approximately $4 billion compared to $7 billion to $8 billion in the original agreement. This amendment provides more operational and financial flexibility for Conergy and allows MEMC Electronic Materials (MEMC) to reallocate wafer volumes to other customers, primarily in the later years of the contract.
Under the terms of the amendment, MEMC will reduce the volume of solar wafers supplied to Conergy, primarily in the later years of the contract, in consideration for slightly higher prices. Conergy will continue to advance funds to MEMC in the form of a refundable capacity reservation deposit, commensurate with the volumes in each year.
All other terms and conditions remain unchanged, including that MEMC will supply solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take or pay basis beginning in the third quarter of 2008, and will participate in 5% of the increase in value of Conergy's solar subsidiary in Frankfurt-Oder, Germany.
Nabeel Gareeb, CEO of MEMC, said: "Conergy has taken several steps to restructure its business and create a sustainable business model for the future. This new agreement supports Conergy's move to a profitable business model, and will create a stronger partner for MEMC. Our amended contract fits in with Conergy's new vision and allows MEMC to reallocate the remaining portion of the wafer volume and further diversify our customer mix."