LDK Solar Co. said Tuesday that it will receive $33.4 million from Japan's Sumitomo Corp. as part of a deal to end a solar wafer supply agreement between the two companies.
Under terms of a 2008 deal, the Chinese solar company agreed to supply silicon wafers to Sumitomo over an eight-year period from 2009 through 2016. As part of the deal, Sumitomo made an advance payment to LDK for part of the contract value.
LDK said it's assessing the financial impact of the termination on its full-year 2012 earnings.
The news comes a day after LDK replaced its CEO and named five new members to its board.
The company said that Xiaofeng Peng will continue to serve as chairman. Xingxue Tong, who currently serves as the company's chief operating officer and as a director on the board, will become CEO.
Xingxue Tong joined LDK in 2007 and has over 15 years of experience in managing operations of companies in the solar industry. Before joining LDK, he was general manager for Southeast Asia business development at GT Solar in the U.S.
LDK, like other solar companies, has struggled this year amid weak demand and intense competition. In addition Washington has imposed hefty tariffs on government-subsidized Chinese companies, accusing them of flooding the market with low-cost panels.
On Monday LDK shares jumped as high as 90 cents, before closing unchanged at 87 cents. In Tuesday afternoon trading, the shares rose 8 cents, or 10 percent, to 95 cents, after hitting 98 cents earlier the day.
Over the past 52 weeks, the company's shares have traded between 71 cents and $6.92.