REC issues shares, restructures debt and writes down inventory


REC carried out some balance sheet acrobatics today, restructuring debt and announcing major impairment charges in the form of inventory and plant write downs, onerous contracts and up-front payments. Bloomberg has reported that its share price has dropped by as much as 30 percent today.

Charges amounting to NOK3.5 billion (US$586 million) – from its Singapore operations – and NOK750 million (US$126 million), to be realized in Q2, were some of the most startling figures released today by REC.

REC Wafer Norway AS was also permitted by bond holders to resign as guarantor under REC’s senior bond agreement. This was the second meeting of REC bondholders that had attempted to do this. At the previous board-holder meeting, on June 7, quorum was not reached. On the back of the move, REC announced that it would cease further funding of REC Wafer Norway AS

In what could be interpreted as a display of solidarity, REC declared that board member Peter Ruzicka, "and related parties" bought 500,000 REC shares. Bloomberg reported that the Ruzicka-controlled company, Canica AS, bought 106.7 million shares with REC Chairman Jens Ulltveit-Moe’s company, Umoe AS, purchasing 266.7 million.

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