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Let's make a deal: GT Solar wins new pact with Chinese firm.

GT Solar has announced a deal with the China-based LDK Solar Ltd.--its largest customer last year and the company whose earlier contract with a competitor resulted in a half-dozen class action suits filed the day after the Merrimack-based firm went public.

LDK agreed to buy an estimated $32 million in reactors for production of material to manufacture solar chips, GT announced, and quoted LDK's chief executive, Xiaofeng Peng, lauding their "long-standing relationship."

GT launched its $50 million initial public offering on July 24 at $16.50 a share, but the stock tumbled to as low as $9.30 the following day after LDK announced it had signed a major contract with JYT Corp., GT Solar's competitor.

In its IPO filings, GT disclosed that LDK represented 62 percent of the company's sales in fiscal 2008, and there was an inherent risk at being so dependent on one customer. However, it did not indicate it was specifically in danger of losing LDK.

In the weeks following, some six lawsuits were filed alleging that the company knew or should have known about that danger, and should have disclosed it when making its IPO.

GT Solar said it has diversified since then, noting in its earnings report at the end of last month--and reiterated in a another press release--that it landed a $173 million contract with DC Chemical.

Thanks to such contracts, the company expects a strong year, with revenues topping $600 million and earnings per share as high as 75 cents a share, according to last month's earning report.
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Title Annotation:contract between LDK Solar Ltd and GT Solar
Author:Sanders, Bob
Publication:New Hampshire Business Review
Article Type:Brief article
Geographic Code:1U1NH
Date:Sep 12, 2008
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