FRANKFURT/NEW YORK - Shares in German solar company Conergy soared on Friday, boosted by statements that negotiations with peer MEMC aimed at an amicable agreement in an ongoing wafer contract dispute were progressing.
Principals of the parties have continued direct discussion on a weekly basis since the mediation sessions at the beginning of October, a Conergy lawyer wrote in a letter to a U.S. court that was obtained by Reuters.
There appears to have been good progress, and we believe it will be clear very soon whether the parties will be able to reach a settlement.
Conergy, whose shares were up 19 percent by 1503 GMT, declined to comment on the statement and a spokesman for MEMC declined to comment, citing company policy not to discuss ongoing negotiations. MEMC shares were up 2.1 percent.
German business daily Handelsblatt had earlier reported that both companies were close to an agreement, citing a statement by Conergy lawyers.
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In August, a New York court partly denied motions by polysilicon maker MEMC against Conergy, a move relating to Conergy's efforts to declare invalid a wafer supply contract it had agreed with MEMC two years ago.
Under the contract, which was signed in late 2007, MEMC supplies solar wafers to Conergy over a 10-year period, with pre-determined pricing, on a take-or-pay basis starting in the third quarter of 2008.
Analysts have said terms of the contract were unfavorable, such as annual price decreases that are slower than the decline of market prices, resulting in above-market costs for Conergy.
(Reporting by Christoph Steitz in Frankfurt and Matthew Daily in New York; Editing by Erica Billingham)