October 22, 2009 / 9:18 PM / in 9 years

UPDATE 1-Timminco says settles with customers

* Customers said contracts had been terminated

* Supply deal terminated, shares to be issued

VANCOUVER, British Columbia, Oct 22 (Reuters) - Silicon producer Timminco Ltd TIM.TO said on Thursday it had reached settlements with the last of its customers that had advanced it deposits and then claimed their contracts were terminated.

Timminco said it had reached an agreement with an unnamed customer to terminate a deal announced in July 2008 that had contemplated shipments of 1,150 tonnes of solar grade silicon over 18 months.

The company also said it will issue about 10 million shares, or about 7.5 percent of its current outstanding total, to settle the C$20.5 million ($19.6 million) deposit due to the customer under the terminated supply agreement.

Timminco is a a subsidiary of Dutch-based Advanced Metallurgical Group NV. Solar grade silicon is used to make solar power cells. It had announced the contract terminations in April.

The announcement came after the close of trading in Toronto on Thursday. The company’s shares ended the day down 22 Canadian cents at C$2.04. (Reporting by Allan Dowd; editing by Rob Wilson)

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