Hanwha Solutions buys into REC Silicon in US solar value chain push

The Moses Lake polysilicon factory. Source: REC Silicon. License: All Rights Reserved.

November 18 (Renewables Now) - Hanwha Solutions Corporation (KRX:009830) has struck two deals to acquire a total of 16.67% in Norway-based advanced silicon materials producer REC Silicon ASA so as to seize the momentum for establishing US-based solar manufacturing capabilities in light of new legislation proposed by US lawmakers.

"The anticipated passage of the [Solar Energy Manufacturing for America] SEMA Act represents an essential element in supporting the creation of a profitable and efficient solar value chain in the United States. REC Silicon is now well positioned to take advantage of this opportunity," the Norwegian company's CEO, Tore Torvund, said.

Under the terms, Hanwha Solutions, the parent of solar panels maker Q Cells, will acquire some 48.2 million new shares in REC Silicon in a directed share issue priced at NOK 20 apiece and worth a total of NOK 964 million (USD 110.3m/EUR 97.5m).

In a second step, the South Korean company will purchase a further 21.9 million shares in REC Silicon at the same price from top shareholder Aker Horizons ASA (OSE:AKH), the renewables platform of Norwegian conglomerate Aker ASA (OSE:AKER). This deal will yield proceeds for the vendor of NOK 438 million. Aker Horizons will cut its stake in REC Silicon to 16.67% from 24.7%.

Hanwha Solutions' investment will provide REC Silicon with the necessary resources to reopen its low-cost fluidised bed reactor (FBR) silicon refining facility in Moses Lake in Washington state in 2023 as expected. The Norwegian company will also gain a more solid financial footing to seize investment opportunities in Butte, Montana where it already operates a semiconductor materials plant.

Adding Hanwha as a shareholder will enable REC Silicon to look at other opportunities and developing markets in the solar, semiconductor and battery industries as well. Through Q Cells, the Korean company holds a quarter of the US market in residential solar PV panels.

The mutually conditional transactions are both scheduled to close early in the first quarter 2022, provided that US antitrust approval is obtained.

REC Silicon, which makes polysilicon and silicon gas for the solar and electronics sectors, has a combined production capacity of 20,000 metric tonnes at its two US facilities.

(NOK 10 = USD 1.144/EUR 1.011)

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