LVCP: GiraSolar Secures Contract Estimated at $65m and Approves Forward Stock Split
Thursday March 16, 8:27 am ET
DEVENTER, NETHERLANDS--(MARKET WIRE)--Mar 16, 2006 -- GiraSolar BV (Other OTC:LVCP.PK - News) today announced that it has secured a four-year supply contract for critical components allowing the company to sell an additional $16.5 million of GiraSolar branded modules based on current pricing in each of the next four years.
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Wieland Koornstra, Chief Executive Officer, said, "Despite the worldwide silicon supply crisis we are continuously increasing the flow of material through our company. We expect that this additional contract will enable our company to market almost 4MWp per year of additional GiraSolar brand module. The contract is for 15.45 MWp over the next four years. This volume contract is not only putting a firm foundation under our company activities for the next several years, but also covers the critical period for which the silicon supply crisis is expected to last. Further ongoing and successfully progressing negotiations with strategic industry partners will likely add even more volume, strengthening our base of operations and increasing opportunities for strong growth, with a focus on developing our position in the USA."
This contract with a major European cell manufacturer represents an anticipated total revenue value of approximately $65 million for the company over the contract period which extends from Q4 2006 into Q4 2010 and should enable the group to market almost 4MWp per year extra of its own GiraSolar brand of modules. The total revenue of $65M represents yearly revenue of approximately 16.5M$ per year for a period of 4 consecutive years starting in October 2006.
"Demand has been larger than we can supply for quite a while. We hope to reduce this unfulfilled volume in absolute terms, though demand is increasing faster than supply. Many new contract proposals received from clients cover multi MWp material requests until December 2007 or even December 2008. This is of course an excellent position to make investments in increased capacity," Koornstra continued.
Separately, the board of directors has approved a 5 for 2 forward stock split to be implemented as soon as possible.
