REC - Extended announcement in connection with the sale of REC Solar

Sandvika, October 4, 2013; On October 1, 2013, Renewable Energy Corporation ASA (REC), entered into an agreement for the sale of subsidiaries in the business segment REC Solar to the newly established REC Solar ASA (together with the subsidiaries referred to as REC Solar). The sale is contingent on, and will be completed following an initial public offering of REC Solar ASA. The share issue in REC Solar ASA is fully underwritten. REC will not own any shares of REC Solar ASA after the initial public offering.

Information about REC Solar

REC Solar is a leading global provider of solar energy solutions. With more than 15 years of experience, REC Solar offers high-quality solar products, project development services and investment opportunities worldwide. REC Solar has been granted listing on the Oslo Stock Exchange and is expected to be listed on or about October 25, 2013. REC Solar employs around 1,500 people globally is headquartered in Singapore where it also manufactures solar panels at its state-of-the-art integrated production plant.

REC will provide REC Solar with a NOK 300 million net cash position, calculated as of June 30, 2013, and will have access to an undrawn credit facility of NOK 200 million from REC.

The Company's Board of Directors will consist of the following directors as of the first date of Listing

  • Ole Enger, Chairman 

  • Øystein Stray Spetalen 

  • Ragnhild Wiborg 

  • Alexandra Bech Gjørv 

  • Erik Sauar 

REC Solar management team consists of the following persons:

  • Øyvind Hasaas, CEO 

  • Martin Cooper, SVP Finance and IT 

  • Patrick Thong, SVP Wafer Operations and Technology 

  • Ter Soon Kim, SVP Cells-Modules Operations and Technology 

  • Luc Grare, SVP Sales and Marketing EMEA 

  • Arndt E. Ludtz, SVP Sales and Marketing North America 

  • Maria Au Yan, VP Legal 

  • Chia Wai Leng, VP Human Resources 

Condensed statement of income for the REC Solar reporting segment for the first half of 2013 and the full year 2012 as well as condensed statement of financial position at June 30, 2013, are included in the attached document.

Assets and liabilities of the REC Solar segment is expected to be adjusted to a pro forma net cash position of NOK 0.3 billion at June 30, 2013. This is expected to increase pro forma equity of REC Solar ASA to approximately NOK 2.1 billion at June 30, 2013.

Further financial information for the combined REC Solar Group can be found in the REC Solar ASA prospectus published on: www.recgroup.com/offering2013.

Information about Renewable Energy Corporation ASA (REC)

REC will after completion of the transaction continue its other current operation in the polysilicon business at its plants in Moses Lake and Butte (USA). This activity has been reported as REC Silicon in REC's segment reporting. REC Silicon has an industry-leading cost position based on proprietary technology for the production of granular polysilicon, and also provides a diversified product offering through electronic grade and float zone polysilicon as well as silane gas.

REC will receive gross sales proceeds of NOK 0.8 billion following the completion of the transaction. Less the NOK 0.3 billion net cash position of REC Solar following a financial restructuring before the sale, it will thus reduce REC's pro forma net debt position at June 30 by NOK 0.5 billion. REC will post the transaction have a pro forma nominal net debt of approximately NOK 1.7 billion at June 30.

The headquarter functions in Norway have been reported in "Other" in REC's segment reporting. These functions will be scaled down and moved to the USA in the near future.

Upon completion of the transaction, on or about October 25, 2013, Renewable Energy Corporation ASA will be re-branded and re-named to REC Silicon ASA.

Condensed statement of income for the REC Silicon reporting segment for the first half of 2013 and the full year 2012 as well as condensed statement of financial position at June 30, 2013, are included in the attached document.

On REC Group level the external assets and liabilities of REC Solar are expected to be impaired and reclassified to "assets and liabilities held for sale" in the third quarter 2013 report. The sale of REC Solar at NOK 0.8 billion is expected to lead to an estimated loss of NOK 1.3 billion calculated based on the pro-forma equity of REC Solar at June 30 (see above). All amounts are preliminary and subject to changes.

Re-presented statement of income for discontinued operations

From the third quarter 2013, external profit and loss items of REC Solar will be re-presented as a part of discontinued operations in REC's consolidated financial statements.

Discontinued operations are re-presented and shown as a single amount (profit/loss for the period from discontinued operations) in the statement of income for the REC Group. Consequently, the re-presented statements of income exclude external line items for revenues and expenses etc of discontinued operations, and the amounts for continuing operations are different from the statements of income for the REC Group presented previously.

REC Wafer has already been presented as discontinued operations from the second quarter 2012. Please see the consolidated financial statements for 2012 for further information on the principles for presenting discontinued operations.

Please note that line items and results re-presented for continuing and discontinued operations will not represent the activities or indicate the profit earned or loss incurred by continuing or discontinued operations as if they were standalone entities, for past periods or likely to be earned or incurred in future periods. This is primarily because there has been significant trading between continuing and discontinued operations, and net gain or loss on deconsolidation or on impairment of assets and liabilities held for sale. A part of REC Solar's and REC Wafer's costs of materials are REC internal costs, and are consequently not re-presented as discontinued operations.

Statement of income re-presented for discontinued operations can be found in the attached document as well as in a separate spreadsheet on the investor section of www.recgroup.com.

For further information, please contact:

Mikkel Tørud,
SVP Investor Relations & Business Development, REC
Telephone: +47 976 99 144
Email: mikkel.torud@recgroup.com

About REC
REC is a leading global provider of solar electricity solutions. With nearly two decades of expertise, we offer sustainable, high-performing products, services and investment opportunities for the solar and electronics industries. Together with our partners, we create value by providing solutions that better meet the world's growing electricity needs. Our 2,200 employees worldwide generated revenues of more than NOK 7 billion in 2012, approximately EUR 1 billion or USD 1.3 billion.

To see more of what REC can offer, visit www.recgroup.com

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
Tables for extended announcement
Attachments:
Tables for extended announcement