Norwegian court rules in favour of REC against China Sunergy.
M2 EQUITYBITES-7 July 2010-Norwegian court rules in favour of REC against China Sunergy(C)2010 M2 COMMUNICATIONS http://www.m2.com
7 July 2010 - The Norwegian court in Salten has ruled in favour of REC Wafer, part of Norwegian solar group Renewable Energy Corporation ASA (OSL: REC), or REC, in a case, in which China Sunergy (NASDAQ: CSUN) claimed that REC Wafer is not part of a signed contract, Norwegian news wire TDN Finans said Tuesday.
Two years ago, REC Sitech and China Sunergy agreed on a contract under which the REC subsidiary would supply mono-wafers for solar cells produced by China Sunergy.
A year and a half ago, REC cancelled the deal since China Sunergy did not renew the bank guarantees, stipulated by the agreement.
REC Sitech later merged with what is now REC Wafer, and China Sunergy claims that REC Wafer is not a party in the matter. Thus, it can not require that the bank guarantees are renewed.
The court disagreed with that and regarded the issue as an ordinary merger, with REC Wafer thereby taking over the interest of the concerned party.
The court also ruled that REC Wafer should get reimbursed legal costs of some NOK1.2m.
"We expect that this case will go further in the legal system and will be appealed. The proceedings will most probably go on in Norway, in addition to the UK. The case is about our right to draw on the bank guarantee," REC IR director Mikkel Torud told TDN Finans.
The bank guarantee totals USD50m and according to TDN Finans has not been utilised.
(EUR1 = NOK8.1; EUR1 = USD1.3)
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|Publication:||M2 EquityBites (EQB)|
|Date:||Jul 7, 2010|
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