China Sunergy Reaches Final Settlement with REC Wafer
China Sunergy Co., Ltd. (Nasdaq: CSUN) ("China Sunergy" or the "Company"), a specialized solar cell and module manufacturer, today announced that it has agreed to settle all disputes with REC Wafer Norway AS ("REC Wafer") and that REC Wafer has released the US$50 million bank guarantees. The amount held in escrow by the banks has been released to China Sunergy today.
The Company entered into a settlement agreement with REC Wafer on October 17, 2011, and on October 28, 2011, the Company made a settlement payment to REC Wafer. The settlement amount is not being disclosed, yet it has very limited impact on China Sunergy's profitability. On the date of this announcement, November 4, 2011, China Sunergy has confirmed that it has received the US$50 million bank guarantees that have been released by REC Wafer.
Stephen Cai, CEO of China Sunergy commented, "We are glad to put this dispute with REC Wafer behind us, and China Sunergy is satisfied with the settlement terms. The released US$50 million bank guarantees go straight back into our working capital and will strengthen the company's ability to weather the current tough solar market."
Previous Developments
In 2009 China Sunergy served a writ upon REC Wafer, claiming REC Wafer is not a party to the contract between China Sunergy and the dissolved REC SiTech AS. In July 2010 the Salten District Court in Norway ruled against China Sunergy in the case. The Company appealed the ruling in August 2010. The appeal hearing, originally scheduled for March 2011, was held in June 2011.
In parallel to the main dispute China Sunergy was granted an injunction with regard to a US$50 million bank guarantee raised according to the contract between China Sunergy and the dissolved REC SiTech AS. The Court of Appeal decided that the injunction was to remain in force until the Court of Appeal passed the judgment on the main case in June 2011.
On June 30, 2011, the Halogaland Court of Appeal ruled in favor of China Sunergy and determined that REC Wafer was not, and had never been a party to the contract. As of a result of this, there was no need for a further injunction with regard to a US$50 million bank guarantee.
About China Sunergy Co., Ltd.
China Sunergy Co., Ltd. is a specialized manufacturer of solar cell and module products in China. China Sunergy manufactures solar cells from silicon wafers, which utilize crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect, and assembles solar cells into solar modules. China Sunergy sells these solar products to Chinese and overseas module manufacturers, system integrators, and solar power systems for use in various markets. For more information, please visit our website at https://www.chinasunergy.com.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts in this announcement are forward-looking statements. These forward-looking statements are based on current expectations, assumptions, estimates and projections about the Company and the industry, and involve known and unknown risks and uncertainties, including but not limited to, the Company's ability to raise additional capital to finance the Company's activities; the effectiveness, profitability, and the marketability of its products; litigations and other legal proceedings; the economic slowdown in China and elsewhere and its impact on the Company's operations; demand for and selling prices of the Company's products, the future trading of the common stock of the Company; the ability of the Company to operate as a public Company; the period of time for which its current liquidity will enable the Company to fund its operations; the Company's ability to protect its proprietary information; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff; future shortage or availability of the supply of raw materials; impact on cost-competitiveness as a result of entering into long-term arrangements with raw material suppliers and other risks detailed in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or to changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results.
