LDK Group's capital increase and takeover offer


Sunways' management board has decided to increase the company's capital share to €17,378,613, an addition of more than five million euros. The company has utilised the authorized capital pursuant to section 5 para. (2) of the articles of association according to Sunways' sources. Following the execution of the capital increase, LDK Solar Germany Holding GmbH will have approximately 33 percent of the then existing share capital in Sunways AG.

Furthermore, LDK Solar Germany has also informed the Sunways' management board of its intention to submit to the shareholders of Sunways a voluntary public takeover offer. This will then be released after the Approval of the publication by the Federal Financial Supervision Authority in Germany or BaFin. This is expected late this month. Shareholders will be offered a cash consideration of 1.90 euros per share in Sunways.

Both capital increase and the completion of the voluntary public takeover offer are still pending at the Federal Cartel Office (Bundeskartellamt). The capital increase will go ahead regardless of the success of the voluntary public takeover offer. These measures are based on an investment agreement entered into by Sunways, LDK Solar Germany and LDK Solar Co. Ltd. The aim is to strengthen cooperation.

In connection with such acquisition by LDK Solar Germany Holding, a termination agreement with respect to the existing long-term supply agreement for wafers between Sunways and the LDK Group has been concluded. The termination is subject to the condition subsequent that the capital increase has not been registered with the commercial register of Sunways by 30 June 2012.

Under the termination agreement, Sunways has waived its claim for repayment of an already made downpayment and has agreed to make a termination payment to LDK Solar Germany Holding in the low double-digit million range (approximately two percent of the initial contract volume). The payment claim of LDK Solar Germany Holding resulting from the termination constitutes approximately 23 percent in the context of the capital increase against contribution in kind while the remaining amount has been structured as a longterm liability.

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