REC Silicon scraps stock placement as WA plant teeters on edge of shutdown

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REC Silicon has dropped plans for a second private placement of shares this year as its stock was consistently trading on the Oslo exchange at a level below the subscription price of the exercise.

The company’s share price has fallen substantially since the end of April. The stock opened trading in Oslo this morning at NOK0.56 (US$0.065) and was up 2.14% to NOK 0.57 by midday – above a year-to-date low of NOK0.47 recorded this month but far below its 52-week high of NOK1.09.

“Shareholders wishing to neutralize the dilution effects of the private placement have, therefore, over a lengthy period had, and continue to have, the opportunity to purchase shares in the open market at prices below the offer price of the contemplated subsequent offering,” REC Silicon explained in an online statement.

In April, the company unveiled plans to offer up to 50 million shares to existing shareholders in a private placement. The offering was designed to follow a similar private placement completed earlier that month. In the previous exercise, REC Silicon raised around NOK170 million in gross proceeds, with Umoe AS increasing its holding in the company to roughly 23%.

 

Factory shutdown

At the time, REC Silicon said it would use the net proceeds to shore up liquidity until it regained access to the Chinese polysilicon market. The Norwegian manufacturer has been caught in the middle of the escalating trade war between President Trump and Beijing as its production lines are based in the United States. REC Silicon explained it would use the funds from its successful private share placement to cover $3.7 million of non-recurring restructuring costs related to the curtailment and planned shutdown of fluidized bed reactor polysilicon production in Moses Lake, Washington State.

The Moses Lake facility operated at approximately 25% capacity throughout the first quarter, REC Silicon revealed at its annual general meeting last month. The company vowed to return to full capacity at the site if it managed to regain full access to the Chinese market but also warned it would initiate a complete, long-term shutdown of the fab if it failed to do so by the end of this month. In March, the company issued a statement urging the U.S. government to push China to quickly end its trade embargo on American polysilicon exports.

In the first quarter, REC Silicon’s revenue fell slightly from $49 million in the preceding three-month period, to $45 million. By volume, polysilicon sales hit 2,004 MT, compared to 1,664 MT in the three months to the end of December.

Last year the company recorded revenue of $221 million, down 19% from a year earlier. Its solar materials business accounted for around $69 million of group revenue as it narrowed nominal debt down throughout the year, by $57 million to $133 million.