Q-Cells AG (QCE.F) and its partners in the Joint Venture EverQ GmbH–Evergreen Solar, Inc. (Nasdaq: ESLR) and REC Renewable Energy Corporation ASA (REC.OL)–have approved significant expansion plans for EverQ.
EverQ will build a third integrated wafer, cell and module production facility at its site in Bitterfeld-Wolfen, Germany. The new EverQ facility will increase EverQ’s production capacity from 100 megawatts (MW) to 180 MW. The partners will invest nearly EUR 150 million in the new EverQ III facility, which is expected to start production in 1Q09.
To support the further growth ambitions of EverQ, REC has offered an additional supply agreement for polysilicon which should enable EverQ to increase its production capacity to 600 MW by the year 2012.
Q-Cells and its partners, Evergreen Solar and REC, have also agreed to start preparations for an initial public offering (IPO) of EverQ immediately. The final timing of the IPO is still to be decided. As part of the preparations for the IPO, the management and organization of EverQ will be significantly strengthened to enable the transformation of EverQ into an independent company with its own branding.
To secure the independent development, EverQ has a proprietary right to the current technology base of Evergreen and will have a right to license all new material technology development by Evergreen on the String Ribbon(TM) platform over the 5 years following the IPO.
LDK Deal
In a separate release, Q-Cells announced a supply agreement for silicon wafers with the Chinese solar company LDK Solar Co., Ltd (NYSE: LDK). The agreement is a ten year "take or pay" contract covering the period from 2009 to 2018.
The total volume will enable Q-Cells to manufacture cells with an overall output of more than 6 gigawatt (GW) additional to current expansion plans.
The pricing of the wafers has some fixed and market related elements for 2009 and 2010, and thereafter the fixed pricing element can be adjusted to market conditions. Furthermore, Q-Cells has the option to purchase 30% of LDK’s additional silicon production if LDK expands its production capacity. In addition, a processing option for the conversion of silicon supplied by Q-Cells has been incorporated into the agreement. Q-Cells will make prepayments in the order of 10% of the silicon value to assist LDK with financing the expansion required to supply these volumes. This agreement which is based on US$ will allow Q-Cells to grow more rapidly from 2009 than previously planned, the company said.
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