REC ASA - Extraordinary General Meeting update
Sandvika, June 5, 2009; REC will at the Extraordinary General Meeting
("EGM") today propose to raise equity in the amount of NOK 4.5
billion, which is NOK 0.5 billion higher than previously announced.
Further, the subscription period will be postponed by approximately
three weeks and subscription is anticipated to take place between
June 29 and July 13.
As stated in the report for the first quarter 2009, the demand for
solar products is currently weak due to the increased economic
uncertainty and low availability of financing for new investment
projects. A lower level of solar installations has reduced the demand
and prices for solar modules, which in turn has started to affect the
supply and demand balances and prices further up the value chain.
The weakening of the market has continued. As previously announced,
REC faces a reduced demand for modules and an increasingly difficult
market for wafers, which has led to reduced production and temporary
lay-offs both in REC Wafer and REC Solar. It should also be expected
that the production facilities within REC Solar will continue to
operate below full capacity also into the third quarter.
Further, REC has continued to make analysis and inspection work
related to its deliveries of solar modules with possibly
malfunctioning junction boxes. These findings indicate that the
one-off provision (non-recurring item) for costs associated with the
repair work need to be increased by approximately NOK 300 million.
This provision will be made in the second quarter of 2009.
The Singapore project continues to trend towards a lower capital
expenditure compared to the initial investment case, reflecting a
less heated construction market.
The long term fundamentals of the PV industry remain, in our view,
intact with return on investments in solar systems reaching record
high levels, mainly due to a significant decrease in the price of
solar modules. The economic stimulus packages, especially in the US,
are expected to have a positive impact on the PV market. However, it
will take some time before the policies implemented materialize as
increased demand.
Based on an overall assessment of the current financial situation,
and in order to ensure sufficient financial flexibility, the Board of
Directors in REC intends to propose at the EGM today to raise equity
in the amount of NOK 4.5 billion, which is NOK 0.5 billion higher
than previously announced.
Due to the complexity of and interdependency between the transactions
involving both equity and loans, it will take more time than
originally anticipated to finalize all terms and conditions of such
agreements and secure full underwriting. As a result, the
subscription period will be postponed by approximately three weeks,
and subscription is anticipated to take place between June 29 and
July 13. The subscription price will be determined and announced on
or about June 22. The last day of trading of the share inclusive the
subscription rights will be June 22.
The proposed resolution will consequently have to be adapted to the
new time schedule. The Board will therefore propose to the EGM that
the implementation of the rights issue shall be contingent on
underwriting agreements being entered into. Such agreements will
ensure that the rights issue will be fully underwritten.
These matters will be further presented in details in a prospectus
that is intended to be released on or about June 29, 2009.
For more information, please contact;
Jon André Løkke, SVP & Investor Relation Officer, +47 907 44 949
About REC
REC is the leading vertically integrated player in the solar energy
industry. REC Silicon and REC Wafer are among the world's largest
producers of polysilicon and wafers for solar applications, and REC
Solar is a rapidly growing manufacturer of solar cells and modules.
REC Group had revenues of NOK 8,191 million and an operating profit
of NOK 2,529 million in 2008. About 2,500 employees work in REC's
worldwide organization. Please also see www.recgroup.com.
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