February 1 (Renewables Now) - REC Silicon ASA (STO:RECO) will hold a 15.06% stake in a Chinese polysilicon joint venture (JV) after a deal with its partner concerning REC Silicon's outstanding capital contribution.
The Norway-based company, whose manufacturing facilities are located in the US, had been in talks to defer its remaining capital contribution of USD 169 million (EUR 136m) until after 2018.
Under an agreement with Shaanxi Non-Ferrous Tian Hong New Energy Co Ltd (SNF), announced today, the Chinese company will pay REC Silicon's outstanding contribution and as a result hold 84.94% in the JV, while REC Silicon will own 15.06%. The companies have developed a 20,000-tonne polysilicon plant in the city of Yulin, Shaanxi province.
The deal calls for REC Silicon to make an interest payment of USD 652,500 to the Yulin JV and pay a total late payment penalty of USD 10.4 million to SNF over two years.
After three years REC Silicon will have the option to buy back the 33.94% equity stake from SNF. REC Silicon's head Tore Torvund said the deal preserves REC Silicon's opportunity to hold 49% in the JV in the future.
(USD 1 = EUR 0.803)