Canada's Timminco Ltd (TIM.TO: Quote) said some of its solar grade silicon customers terminated their contracts and the silicon processor added it was in discussions with its controlling shareholder to raise about C$15 million.

Shares of Timminco, which is a subsidiary of Dutch-based Advanced Metallurgical Group NV, fell as much as 35 percent to C$2.45 in morning trade on the Toronto Stock Exchange.

In the event of an early termination, the company is liable to repay any remaining balance on the deposit within a specified time period, Timminco said in a news release.

The company said it was in discussions with the solar grade silicon customers focused on alternatives to the existing contractual commitments.

The silicon processor said the customers have paid deposits, which were non-interest bearing pre-payments to be credited against future deliveries of solar grade silicon under the contracts.

Timminco, which recently amended its credit agreement with Bank of America to increase the revolving line of credit to $50 million, said it was in discussions with AMG Advanced Metallurgical Group N.V. (AMG.AS: Quote) regarding an equity offering for aggregate gross proceeds of C$15.0 million.

The offering is expected to be by way of a private placement, with AMG subscribing for a minimum of 50 percent, and up to 100 percent, of the common shares that may be issued, Timminco said.

Last month, Timminco said it will temporarily curtail production of silicon metal due to difficult market conditions and reduced demand for silicon metal in the chemical and aluminum industries.

For the first quarter, the company said it shipped 131 metric tons (mt) of solar grade silicon at an average selling price of $58 per kg, resulting in gross revenue of $7.6 million for this product line in the quarter.

In addition, Timminco announced the promotion of John Fenger, President - Light Metals, as President and Chief Operating Officer.

The company's shares, which have gained more than 60 percent of their value in the last one month, were trading down 31 percent at C$2.60 in mid-day trade on the Toronto Stock Exchange. (Reporting by Krishna Chaithanya in Bangalore, Editing by Dinesh Nair)

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