UK investment fund asks REC to delay board meeting
October 12 – LONDON – A UK-based investment group is asking Norway’s REC Silicon to delay an upcoming board meeting after expressing concern over the composition of the board and future arrangements to supply the products from the company to its largest shareholder, South Korea-based Hanwha Solutions, according to a letter made public on Monday.
In a letter made public on Businesswire, London-based Lodbrok Capital – which says it owns 5.2 million shares of REC and owns nearly 20% of the company’s outstanding secured debt – asked REC to postpone the next meeting of its board of directors on October 21. out of fear that the South Korean company, which is REC’s largest shareholder, could obtain a majority of the company’s board of directors.
The meeting was convened in late September to elect three new board members, including Hanwha Holdings USA Managing Director Taewon Jun as Chairman of the Board, Hanwha Solution Vice Chairman Dongkwan Kim as as vice-chairman of the board, and British investment banker Vivian Bertseka. to join the company’s board of directors. If approved by the company’s shareholders, it would give Hanwha members two of four seats on the company’s board.
According to the letter, Lodbrok Capital partner Joachim Bale and chief investment officer Mikael Brantbert said they were concerned that any long-term supply deal for solar-grade polysilicon and electronics-grade silane – silicon gas – breaches Norwegian law which governs how companies deal with other companies that hold stakes, and would also prevent REC from selling its silicon at market prices, depriving the company of potential future profits and shareholders of potential future value.
“Having invested in REC for over half a decade, we are very concerned that a new management team, whom we have never had the opportunity to meet and who have effectively been selected by a board Board of Directors controlled by Hanwha, will lead the company through the finalization of a potentially company-defining contract with Hanwha,” Bale and Brantbert wrote.
Bale and Brantbert both said that if Hanwha was going to control half of REC’s board seats while the company negotiated a supply deal with REC, the company would also have to own more REC, and suggested that REC sells its Butte, Montana operation or works with Lodbrok to secure financing to pay for those shares.
Chuck Sutton, REC’s vice president for fluid reactor sales, said the company would wait for comments from the board of directors before formally responding to Lodbrok’s letter.
Hanwha Solutions, which also produces Q Cell solar panels, acquired a 30% stake in REC Silicon at the end of 2021. REC’s production facility in Moses Lake manufactures silicon for solar panels using a patented process and was closed several years ago following a long trade dispute with China. which effectively blocked the sale of its product to Chinese solar panel makers. REC is expected to restart production in 2023, according to company officials.
Charles H. Featherstone can be reached at [email protected]