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On September 11, 2009 the Norwegian court granted a preliminary injunction, based on China Sunergy's petition, prohibiting REC Wafer Norway AS from drawing on the USD50 million in bank guarantees. One of the key reasons for this decision is the fact that the original party to the contract, REC SITECH AS, no longer exists given its merger with REC ScanWafer AS, which later changed its name to REC Wafer Norway AS after the merger. China Sunergy was never informed of this merger despite the contractual obligations of REC to do so prior to any such action.
The court refers in particular to the fact that it has been impossible for China Sunergy to extend the guarantees. The reason for this is that the original party to the contract and supplier has merged with another company, namely REC Wafer. The court has not found evidence that Nordea Bank has consented to the merger and thus has consented to the change to the parties on the rights side. Despite the fact that REC SiTech AS never informed China Sunergy of its dissolution after the merger, even though the merger plans had come far by the time the contract was entered into, the inability of China Sunergy to extend the guarantees in the name of REC SiTech AS has been stated as a basis for REC Wafer's current claims. The preliminary injunction inhibits REC Wafer's ability to draw on the bank guarantees before the legal situation is clarified.
Salten District Court has also noted that there must be a breach of contract on the part of China Sunergy in order for REC Wafer to be able to draw on the guarantees. There have been no wafer shipments from REC Wafer to China Sunergy, and the court has found that REC Wafer has not pleaded that any fundamental breach of the contract with China Sunergy exists. The court states that the conditions for drawing on the guarantee are therefore not present.
The preliminary injunction is in effect until October 15th, 2009. The court has stated that China Sunergy and REC Wafer should clarify the legal issues that the merger has created by that time.
About China Sunergy Co., Ltd.
China Sunergy Co., Ltd. (Nasdaq: CSUN | Quote | Chart | News | PowerRating) ("China Sunergy") is a specialized manufacturer of solar cell products in China. China Sunergy manufactures solar cells from silicon wafers utilizing crystalline silicon solar cell technology to convert sunlight directly into electricity through a process known as the photovoltaic effect. China Sunergy sells solar cell products to Chinese and overseas module manufacturers and system integrators, who assemble solar cells into solar modules and solar power systems for use in various markets. For more information please visit http://www.chinasunergy.com .
For further information contact:
Peter Schmidt
FD Asia
Tel: +86-10-8591-1953
Email: peter.schmidt@fd.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 fact in this announcement are forward-looking statements. These forward-looking statements and 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; 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.
SOURCE China Sunergy Co., Ltd.
http://www.chinasunergy.com
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