Conergy Cites MEMC As Reason For Declining Profits
The Management Board of Conergy AG has indicated that a loss of half of the share capital of the company has occurred (§ 92 para 1 AktG). As of 30 September 2012, the equity of Conergy AG was at € 72 million. Therefore, an extraordinary General Meeting will be convened shortly with the publication of the agenda within the next few days. This is due to the current business development and the one-time effect on earnings from the contract termination with the U.S. wafer manufacturer MEMC Electronic Materials, Inc. (MEMC).
On 25 September 2012, Conergy AG terminated its supply agreement with MEMC originally running until 2018, thus immediately freeing Conergy from a wafer supply commitment amounting to about USD 600 million. In return, the equivalent of a cash security in the amount of about USD 21 million, paid in 2007, remained with MEMC, which lead to a one-off effect on earnings.
"The convocation of the extraordinary General Meeting does not affect our business operations. We simply comply with our legal duty to provide information to our shareholders. We are currently not planning any decisions on capital measures at the shareholders' meeting," said Conergy CEO Dr. Philip Comberg. "For Conergy, the termination of the contract is a relief from a heavy burden of the past and an important condition for the advancement of the company."
Since the termination of the contract in late September, Conergy can purchase its demand for production materials at competitive prices, and free from "“ compared to today's market environment "“ the unfavourable contract terms agreed upon with MEMC. The system supplier can now operate more flexibly and lowers its cost structures for raw materials continuously, as the company is now able to benefit even more from the general price decline of silicon-based production materials.
