Senior Bond Holders Approve Proposed Split of REC

REC Group bond holders’ meetings for the REC01, REC02 and REC03 bonds were held Aug. 27, 2013. The required quorum was obtained and the bondholders in all bonds approved the proposed split of the company. The approval is contingent upon REC carrying out the proposed offer to buy back senior bonds as per the company announcement on Aug. 23, 2013.

The bondholders’ approval is an important step in the process of separating REC’s silicon and solar businesses as announced on July 18, 2013:
• REC will establish REC Solar ASA as an independent listed company.
• REC shareholders will be offered non-tradable subscription rights in REC Solar ASA.
• The offering of 100% of the shares in REC Solar ASA, valued at NOK 800 million, has been underwritten by the largest shareholders of REC.
• Both companies will improve their financing, with REC Solar ASA being established as a debt-free leading provider of solar panels and solutions.

Solar is an industry in strong growth and is becoming an increasingly competitive source of energy. The industry is, however, immature, fragmented and weakly capitalized, and ripe for significant consolidation. REC recognizes that it is increasingly demanding to grow and maintain a leading position in a fully vertically integrated business model. Only limited operational synergies exist between the Silicon and Solar divisions today. The transaction will allow the two companies to follow separate consolidation paths as industry leaders in their fields, while ensuring a solid financial base for both companies.

REC Solar ASA will be leading provider of solar panels and solutions. It has a proven track record of cost reduction and high product quality, and will continue to invest in the implementation of new technology. The company has a strong market position in Europe and Asia, and will be led by CEO Øyvind Hasaas and headquartered in Singapore.

REC will provide REC Solar ASA with a NOK 300 million net cash position, calculated as of June 30, 2013. It will have an additional undrawn credit facility of NOK 200 million from REC, to potentially be replaced by third party financing. REC Solar ASA will have a debt free financial base at the time of listing. This will allow for growth and further investments in new technology.