REC replaces existing syndicated credit facilities and issues new equity

Sandvika, March 31, 2010; Renewable Energy Corporation ASA (“REC”) replaces existing syndicated bank credit and guarantee facilities and issues new equity to strengthen the company’s capital structure. The funding requirement to complete the ongoing investment program is unchanged, however the new financing will:
 

• Improve the financial covenants to fit the ongoing investment program
• Better align the installment profile to expected cash flows
• Reduce the number of banks in the syndicated credit facilities

REC’s existing credit lines of approximately NOK 15.5 billion will be replaced by a new, fully underwritten credit and guarantee facilities of NOK 10 billion, and a NOK 4 billion fully underwritten equity rights issue. The total NOK 14 billion of financing fully reflects REC’s funding need to complete the ongoing investment program.

“REC is in the final stages of a NOK 25 billion investment program that will enable us to maintain a leading position in the solar industry. It is crucial for all our stakeholders that we keep the momentum in the ramp-up of new plants and cost reductions across all business segments. We have now achieved a more robust and flexible financing structure that provides a solid basis for the future development of the company,” says CEO Ole Enger.

REC has earlier announced that it is likely that certain financial ratios would fall outside agreed limits under the company’s existing credit facilities. The new facility contains improved financial covenants reflecting the expected cash flows with comfortable headroom compared with the company’s business plan. “Finding a good financing solution has required the continued backing from both owners and lenders, and we are very pleased to see that our main shareholders and our close Nordic banking relations offer strong support in a challenging market. The existing financing structure proved to be inflexible, and with a new financing solution secured, the organization can now direct all its attention to develop REC as a leading supplier of solar energy solutions,” says Enger.

The new bank debt structure includes a multicurrency revolving credit facility of up to NOK 6,675 million and a guarantee facility of up to NOK 3,325 million (SGD 792 million). This will enable prepayment of the two existing credit facilities and the existing guarantee facility which in total involve 19 banks. REC has signed a committed term sheet concerning the new underwritten credit and guarantee facilities with DnB NOR, Nordea and SEB.

The proposed issuance of new shares will generate gross proceeds of approximately NOK 4 billion and will be conducted as a fully underwritten rights issue, in order to ensure equal treatment of REC's more than 30,000 shareholders. The rights issue is, subject to certain conditions, fully underwritten by REC's main shareholders Orkla, Folketrygdfondet and a bank syndicate consisting of DnB NOR Markets, Nordea and SEB. DnB NOR Markets, Nordea Markets and SEB Enskilda have been retained as Joint Global Coordinators and Joint Bookrunners for the rights issue. Arctic Securities is acting as financial adviser to the company.

Freely tradable subscription rights will be applied for listing on the Oslo Stock Exchange. Terms of the rights issue, including the subscription price and the number of shares to be issued, will be proposed by the Board of Directors and are expected to be announced on or about April 29, 2010.

REC will call for an extraordinary general meeting ("EGM") to be held on or about April 29, 2010 to resolve the rights issue. According to the current timetable, and subject to approval by the EGM, the subscription period for the rights issue is expected to commence on or about May 6, 2010 and end on or about May 20, 2010. REC's shares are expected to be traded exclusive of subscription rights from on or about April 30, 2010.

REC will prepare and publish a prospectus for the rights issue, which will be subject to approval by the prospectus authority prior to publication.

All dates and other figures with respect to the rights issue included herein remain tentative and subject to change. Any changes will be announced at the extraordinary general meeting or through stock exchange announcements.

Analysts and press conference at 9.30 CET
REC will host a press conference and a conference call for questions from analysts and the media today at 09.30 CET. Analysts and press can join the press conference and meet REC’s management either at i) REC’s head office ii) via an audiocast or iii) via a conference call.
i) Press conference at REC’s head office at Kjørboveien 29, 1337 Sandvika
ii) Audiocast available on www.recgroup.com/new_financing. A replay of the audiocast will be made available immediately after the press conference.
iii) Conference call

For the conference call, please make sure to dial in at least 5 minutes ahead of time to finalize your registration:
Norway free call: 800 80 119
International dial in: +47 23 18 45 01

Immediately after the call, a replay of the analyst conference call will be made available. To access replay of the conference call, please dial +47 23 18 45 02 and then use the following procedure: Enter account no: 1524 followed by # (pound-sign) and press 1. Continue by entering conference no: 524 followed by # (pound-sign) and press 1 to play.
Analysts and press conference at 14.00 CET
Another conference call will be hosted today at 14.00 CET.
For the conference call, please make sure to dial in at least 5 minutes ahead of time to finalize your registration:
Norway free call: 800 80 119
International dial in: +47 23 18 45 01

Immediately after the call, a replay of the analyst conference call will be made available. To access replay of the conference call, please dial +47 23 18 45 02 and then use the following procedure: Enter account no: 1683 followed by # (pound-sign) and press 1. Continue by entering conference no: 683 followed by # (pound-sign) and press 1 to play.


NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, HONG KONG, JAPAN OR THE UNITED STATES: This press release does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein may not be offered or sold in the United States absent registration or an exemption from registration as provided in the U.S. Securities Act of 1933, as amended. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into the United States, Australia, Canada, Hong Kong or Japan.