REC raises $20 million in new share sale

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MOSES LAKE — Embattled silicon producer REC Silicon has raised roughly $20.5 million in a new share issue intended to shore up the company’s financial position.

In a news release, the Norway-based manufacturer of silicon ingots for solar panels and silicon gas (silane) for flat screen displays has issued over 250 million new shares in a “private placement” to a select group of investors.

“This is to shore up our cash position,” said Vice President for Business Development Francine Sullivan. “We would have preferred not to have to reach out like this.”

Sullivan, however, said the fact that the share issue was “oversubscribed” — meaning there was more interest in buying shares than there were shares to buy — was a good sign and showed “that people are still interested in investing in the company.”

According to the news release, around $3.7 million of the funds raised from the share issue will be set aside for “restructuring costs... to curtail and shut down” the polysilicon production facility in Moses Lake “unless access to the Chinese market is restored.”

REC Silicon has been unable to sell polysilicon, which is used to make silicon wafers for solar power panels, to Chinese solar panel producers following a trade and tariff dispute that arose in 2013. China is the largest market for polysilicon in the world, and the company has been limping along since on the strength of its silane gas production in Montana and a single large customer for polysilicon in Taiwan.

“China’s trade embargo has put us under tremendous pressure,” Sullivan said. “Trade negotiations are continuing, and at last report, the administration (of President Donald J. Trump) has made us a priority, and we’re optimistic, but there’s nothing yet.”

The company issued a total of 254,381,807 shares at a total price of 67 øre (1 Norwegian krone = 100 øre), or 8 cents per share, on Wednesday, with the largest single purchaser being Norwegian industrial and energy development fund Umoe, which purchased 58,380,639 shares, according to the news release.

Umoe now owns nearly 584 million shares in REC Silicon, approximately 23 percent of the company’s 2.5 billion outstanding shares.

On Thursday, the Oslo Børs, Norway’s stock exchange, reported that REC’s shares ended trading at 71 øre per share (8.5 cents), down very slightly from an opening price of 72 øre per share (8.6 cents).

Charles H. Featherstone can be reached via email at cfeatherstone@columbiabasinherald.com.

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