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MANILA – The Philippine unit of US-based solar panel manufacturer SunPower Corp. wants to terminate its supply agreement with the Lopez group, and is seeking $8.8 million in damages for breach of contract.
In a disclosure to the Philippine Stock Exchange, Lopez-controlled First Philippine Holdings Corp. said its majority-owned unit First Philec Solar Corp. received a letter from SunPower Philippines Manufacturing Ltd., claiming FPSC was in breach of their November 7, 2007 wafering supply and sales agreement, which expires next year.
FPSC is a joint venture between SPML and First Philippine Electric Corp., the manufacturing arm of the Lopez group. First Philec holds 74.5 percent of FPSC, which is the country’s only large-scale manufacturer of solar-grade silicon wafers that form the core in making solar cells and panels.
“FPSC denies being in breach or owing SPML the sum of $8.8 million,” FPH said, adding that its unit in turn alleged that the SunPower subsidiary had violated the supply agreement and owed FPSC at least $27 million.
FPH said FPSC “has contested the termination and demanded discussions with SPML pursuant to the dispute resolution mechanism of the Supply Agreement while reserving all its rights under this agreement and the law.”
Earlier, FPH president Elpidio Ibanez said FPSC reduced production at its Batangas plant by 25 percent to 45-60 million wafers, citing overcapacity in the solar industry. Ibanez said it would take 2 years before demand picks up to wipe out the glut.
The dispute with SunPower comes as the Lopez group is amid a separate conflict with another joint-venture partner, Nexolon Co. Ltd. of Korea.
Lopez-owned First PV Ventures Corp. and First Philec Nexolon Corp. earlier received a notice from Nexolon that it was terminating their wafer slicing and supply contract because of an alleged breach of the agreement.
First PV also had sued Nexolon for alleged breach of agreement. Nexolon had since invoked a put option, requiring First PV to buy out the Korean partner in FPNC.
First PV and Nexolon formed a $100 million joint venture for the establishment of an initial solar wafer-slicing plant in the Philippines.
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