Thursday, December 08, 2022

UK investment fund asks REC to delay corporate board meeting

Staff Writer | October 12, 2022 1:25 AM

LONDON — A U.K.-based investment group is asking Norway-based REC Silicon to delay an upcoming board of directors meeting after expressing concern about the board’s makeup and future arrangements to supply the company’s products 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 states it owns 5.2 million shares in REC and holds close to 20% of the company’s outstanding secured debt — has asked REC to delay its upcoming Oct. 21 board of directors meeting out of concern that the South Korean company, which is the largest shareholder in REC, could secure a majority of the company’s board of directors.

The meeting was called at the end of September to elect three new members of the board of directors, including Hanwha Holdings USA Managing Director Taewon Jun as board chair, Hanwha Solution Vice Chairman Dongkwan Kim as the board’s deputy chair, and UK 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 the four seats on the company’s board of directors.

According to the letter, Lodbrok Capital partner Joachim Bale and Chief Investment Officer Mikael Brantbert said they were concerned that any long-term supply arrangement for solar-grade polysilicon and electronic-grade silane — silicon gas — would both fall afoul of Norwegian law that governs how companies deal with other companies that hold ownership 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 been invested in REC for more than half a decade, we are highly concerned that a new executive team, which we have never had an opportunity to meet and which has effectively been selected by a Hanwha-controlled board, will lead the company through the finalization of a potentially company-defining contract with Hanwha,” Bale and Brantbert wrote.

Both Bale and Brantbert said if Hanwha is going to control half the seats on the REC board as the company negotiates a supply deal with REC, the company should also own more of REC, and suggested that REC either sell its Butte, Montana operation or work with Lodbrok to secure financing to pay for those shares.

Chuck Sutton, REC’s vice president for fluid be reactor sales, said the company would wait for the board of directors to comment before making an official response to the Lodbrok letter.

Hanwha Solutions, which also produces Q Cell Solar Panels, acquired a 30% stake in REC Silicon in late 2021. REC’s Moses Lake production facility makes silicon for solar panels using a patented process and was shuttered several years ago following a lengthy trade dispute with China which effectively blocked the sale of its product to Chinese solar panel makers. REC is set to restart production in 2023, according to company officials.

Charles H. Featherstone can be reached at

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