* Q-Cells won't pursue collecting $244.5 mln bank guarantee
* Joint business activities of companies remain unchanged
* Q-Cells to deliver cells to LDK in future
* Shares in Q-Cells turn positive, up 3.12 pct
* Shares of LDK rise 7 pct (Updates LDK share movement)
By Christoph Steitz
FRANKFURT, Dec 4 (Reuters) - Q-Cells QCEG.DE, one of the world's largest makers of solar cells, renegotiated a contract with the Chinese company LDK Solar LDK.N, a move that gives the German company flexibility over component wafer supplies.
An industry oversupply of solar parts, such as wafers, has caused prices for components to drop by up to 50 percent, leading analysts to question Q-Cells' future as it piled up losses of nearly 1 billion euros ($1.51 billion) this year. [ID:nL8642967] [ID:nLR576752]
Both companies on Friday struck a deal not to take legal action against each other, freeing up Q-Cells to focus on its ongoing restructuring.
As part of the agreement, Q-Cells said it would not seek a $244.5 million bank guarantee secured by a German bank as part of the original LDK contract, which was signed in 2007 and fell apart last month.
Q-Cells and LDK said the contract, under which LDK supplies wafers to Q-Cells from 2009 to 2018, would remain intact, but with conditions changed.
"Q-Cells and LDK Solar have agreed to increase the flexibility of delivery schedule. Flexible pricing based on market levels and Q-Cells' preferred customer status will apply for the entire remainder of the contract term," the companies said in a joint statement.
"This is good news for Q-Cells, although they now will not have the $244.5 million guarantee," said SES Research analyst Karsten von Blumenthal.
"The contract is much more flexible now and Q-Cells does not have to source that many wafers which eases the pressure," Blumenthal said.
Shares in Q-Cells turned positive on the news and were up 3.12 percent at 1513 GMT, outperforming the S&P global clean energy index .SPGTCLEE, which stood 1.78 percent higher.
The news also lifted shares of LDK, which were up 7.3 percent at $8.99 in trading on Friday on the New York Stock Exchange.
Q-Cells had made a prepayment of $244.5 million shortly after it signed the contract with LDK in late 2007, when wafer prices were much higher. [ID:nLB171076]
The row between Q-Cells and LDK had raised questions about the viability of a separate joint venture project which was set up in April.
However, the companies said they were improving their cooperation, with Q-Cells set to supply cells for LDK's module production, while LDK's panels would then be used in Q-Cells's solar parks. ($1=.6634 Euro) (Additional reporting by Laura Isensee in Los Angeles; Editing by Sharon Lindores) ((email@example.com; + 49 69 7565 1269; Reuters Messaging: firstname.lastname@example.org))