Suntech troubles hit poly supplier OCI29. April 2013 | Global PV markets, Industry & Suppliers, Investor news | By: Max Hall
South Korean polysilicon manufacturer OCI has been dragged into the Suntech maelstrom thanks to an overreliance on the ailing Chinese cell and module manufacturer.
With Reuters reporting Suntech provided 9% of OCI's 2012 revenues, the announcement by the Seoul-based poly manufacturer of the cancellation of three large supply contracts to Suntech saw OCI's share price dive almost 10% to a six-year low at the start of yesterday's trading before recovering to close 2% down.
OCI announced the termination of two contracts to Suntech's main Wuxi Suntech manufacturing unit – which entered insolvency in March – and the cancellation of a third contract to Suntech's European subsidiary after Swiss authorities granted a two-month moratorium to allow the business to restructure debts.
The Wuxi contracts, dating from March and August 2008, are for agreements to supply US$631.5 million and $751.6 million of polysilicon of which $419.4 million and $558.7 million of payments were outstanding, respectively.
The 2011 European contract to supply Suntech Power International with $429 million has an outstanding balance of $390.1 million.
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