China Sunergy says injunction against REC extended

NEW YORK (AP) — Solar-cell maker China Sunergy Co. Ltd. on Friday said a court in Norway extended its injunction against REC Wafer Norway, allowing China Sunergy to hold back $50 million in bank guarantees.

In a statement last month, China Sunergy said a preliminary injunction granted by the Salten District Court on Sept. 11 prohibits REC Wafer Norway AS from drawing on $50 million in bank guarantees originally meant for a wafer provider that it merged with. Wafers are used in the production of solar panels,

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, China Sunergy said.

China Sunergy said it was never informed of this merger despite REC's contractual obligations to do so prior to any such action.

The injunction was set to expire on Thursday, but has now been extended. In addition to its application for extension, China Sunergy served a writ upon REC Wafer Norway AS claiming that it is not, and has never been, a party to the contract entered into between REC Sitec AS and China Sunergy.

Earlier this week, the court ruled that the injunction shall remain in force until the issue covered by the writ is resolved.

China Sunergy shares fell 4 cents to $4.05 in midday trading.