Embattled Norwegian polysilicon producer REC Silicon ASA is facing a fresh crisis after Finnish lender Nordea called in a NOK150 million ($16.8 million) loan on Friday.
A brief statement by REC revealed Nordea had called in the indemnity loan taken out by the polysilicon manufacturer in relation to the failure of one of its subsidiaries in 2012.
Although the REC Silicon statement did not identify the bankrupt business unit concerned, it is likely to be wafer manufacturing operation REC Wafer Norway, which was forced to file for bankruptcy in August 2012 after its parent refused to make good an asset-to-liability deficit of NOK1.2 billion.
Another blow
At the time, pv magazine reported REC Silicon ASA said it expected to incur costs of NOK400,000 related to “guarantees, loans and indemnity agreements”.
The latest hit to a bettered balance sheet comes after REC Silicon halted operations at its Moses Lake production facility in Washington, in the U.S. in July.
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The company – which has been caught in the crossfire of the China-U.S. trade war and locked out of the Chinese polysilicon market since 2014 – used its third-quarter update in early October to announce it would listen to offers for its other production facility, a polysilicon and silane gas plant in Butte, Montana, also in the U.S.
Buffer needed
With only $46.2 million in the bank at the end of September, REC’s Q3 update said a sale of the Butte facility would enable it to retire debts, prepare for the possible resumption of operations at Moses Lake and, crucially, “provide a buffer for contingent liabilities (tax examination and indemnity loan)”.
Although no update has been provided on an historic tax investigation by the Norwegian authorities, the requirement to fulfil Nordea’s NOK150 million loan repayment could pile on pressure for the company to sell off its Butte facility. Such an outcome would appear to leave a 15% stake held by REC Silicon in a poly plant in China its only revenue-generating operation.
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