Silicon wafer maker MEMC Electronic Materials Inc WFR.N said it agreed to pay 70 million euros to Evonik Industries to settle a dispute over the cancellation of a contract to supply trichlorosilane to MEMC's Italian polysilicon facility.
MEMC idled its facility in Merano, Italy, under a restructuring plan last year, resulting in the termination of two long-term take-or-pay supply agreements with Evonik.
MEMC said it expects to recognize a material benefit to its operating income in the ongoing quarter as the settlement amount was below its estimate. The payment will settle all obligations under the terminated supply agreements, MEMC said.
As part of the agreement, MEMC will also acquire Evonik's trichlorosilane production plant located on MEMC's Merano site, the U.S. company said.
Trichlorosilane is a key chemical used in the manufacturing of polysilicon, the primary raw material for making most solar photovoltaic cells.
Shares of the Missouri-based company were flat at $2.98 on Wednesday morning on the New York Stock Exchange.
($1 = 0.7961 euros)
(Reporting by Thyagaraju Adinarayan; Editing by Sreejiraj Eluvangal)