REC Silicon ASA: Extended announcement in conne...

Sandvika, February 26, 2014: REC Silicon ASA announced today that its subsidiaries, REC Silicon AS and REC Silicon Inc, have entered into agreements with Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. governing a joint venture partnership that will expand operations into China.

REC Silicon AS and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. have entered into joint venture agreements for the formation of a production joint venture and a sales joint venture.  REC Silicon Inc and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. have entered into a technology transfer agreement, governing the terms under which REC Silicon Inc will transfer the exclusive, non-transferrable right to use its technology in China and Taiwan to the production joint venture.

The production joint venture will construct and operate a new plant for the production of silane gas, solar and electronic grade polysilicon, utilizing REC Silicon's next generation fluidized bed reactor (FBR) technology.

The new plant will be located in Yulin, in the Shaanxi Province, and is expected to have capacity of 18,000 metric tons of granular polysilicon, an additional 1,000 metric tons of Siemens polysilicon, and 500 metric tons of silane gas loading.

As part of these agreements, REC Silicon expects to receive upfront payments from Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd., totaling US$198 million (net of taxes) in March and August of 2014, for the production joint venture's rights to use its technology.  As the production joint venture will have ownership of the technology rights, Shaanxi Non-Ferrous Tian Hong New Energy Co. Ltd. will be reimbursed by the production joint venture which will secure debt financing for the reimbursement instead of being funded by additional contributions from either party. Upon receipt of these payments and the issuance of necessary licenses for the production joint venture to conduct business, REC Silicon, Inc will begin to transfer necessary technology and operating procedures to the production joint venture.

REC Silicon will contribute US$244 million to acquire a 49% equity interest in the production joint venture.  REC Silicon expects to make its capital contribution in three installments on the following schedule: US $75 million in September of 2014; US$15 million in August of 2016; and US$154 million in August of 2017.  To acquire a 51% interest in the production joint venture, Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will contribute US$254 million in two installments, on a similar schedule.

REC Silicon does not anticipate taking on any additional debt nor offering any new equity rights in order to fulfill its investment obligations in the joint venture.  Receipt of the upfront payments will allow REC Silicon to meet its 2014 debt obligations and increase REC Silicon's financial stability.

The production joint venture will be governed by a board of four directors, with REC Silicon and Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. each appointing two directors.  For the first three-year term, REC Silicon will appoint the Vice Chairman of the board and both the Chief Financial Officer and Chief Technology Officer; Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will appoint the Chairman of the board and the Chief Executive Officer.  During the second three-year term, REC Silicon will appoint the Vice Chairman of the board and the Chief Executive Officer of the production joint venture; Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. will appoint the Chairman of the board and the Chief Financial Officer of the production joint venture.  Thereafter, appointment of those four positions will rotate between Shaanxi Non-Ferrous Tian Hong New Energy Co., Ltd. and REC Silicon every three years.

REC Silicon and Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. have also entered into an agreement for a new sales joint venture that will be established close to the start up of the production joint venture.  The term of the sales joint venture is six years, and each party will own a 50% equity interest.  Capital contributions of the respective parties will be determined closer to incorporation.  This sales joint venture will be responsible for the marketing and sales of all products from the new production joint venture and all equivalent products from REC facilities in the US.

The sales joint venture will be governed by a board of four directors, with REC Silicon and Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. each appointing two directors.  For the initial three-year term, REC Silicon will appoint the Chairman of the board and the Chief Executive Officer; Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. will appoint the Vice Chairman of the board and the Chief Financial Officer.  In the second three-year term, REC Silicon will appoint the Chairman of the board and the Chief Financial Officer; Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. will appoint the Vice Chairman of the board and the Chief Executive Officer.

Tore Torvund, CEO of REC Silicon ASA said, "I am excited to announce this strategic alliance with an ideal partner.  This joint venture is a key step in the worldwide growth of REC Silicon and will strengthen its leadership position in the industry.  It demonstrates the value of our technology and allows us to expand our capacity without requiring REC Silicon to use its current assets or to raise other funds in order to make its capital contribution."

REC Silicon is recognized in the industry as a leader in technology and efficient production, and it brings this proven technology along with production experience to the new joint venture.  Shaanxi Non-ferrous Tian Hong New Energy Co., Ltd. is a wholly owned subsidiary of Shaanxi Non-Ferrous Metals Holding Group Co., Ltd., a well established Chinese company with assets in excess of US$17 billion.

Investor call:
Later today, REC Silicon ASA will host an investor conference call with the possibility of questions and answers at 2:30 CET.  Please make sure to dial in at least 5-10 minutes ahead of time to finalize your registration.

International dial in: [phone]

Norway Toll Free: 800 56054
UK Toll Free: 0800 279 5004
USA Toll Free: 1 877 280 2296
China Toll Free: 10800 712 2769

Please provide confirmation code 6136722 and state your name, company and country of residence.

After the investor conference call, for subsequent media inquiries, please contact:

In EU and China:
Tore Torvund
[e-mail]
[phone]

In the US:
Ryan Dunn
[e-mail]
[phone]

About REC Silicon ASA
REC Silicon ASA is a leading producer of advanced silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries worldwide. We combine 25 years of experience and proprietary technology with the needs of our customers and annual production capacity of more than 20,000 MT of polysilicon from our two US-based manufacturing plants. Listed on the Oslo Stock Exchange (ticker: REC), the company is headquartered in Moses Lake, Washington and employs approximately 740 people.

For more information, go to: www.recsilicon.com

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)

---

This announcement is distributed by NASDAQ OMX Corporate Solutions on behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: REC Silicon ASA via Globenewswire

HUG#1764369