Citing effects from the ongoing U.S.-China trade war, REC Silicon has decided to consider the divestment of its production facility in Butte, Mont.
Headquartered in Norway, the company is a producer of silicon materials, delivering high-purity polysilicon and silicon gas to the solar and electronics industries.
Its other U.S. facility, located in Moses Lake, Wash., was already placed in a long-term shutdown earlier this year due to the lack of access to polysilicon markets in China. REC Silicon is also a 15% owner of a granular polysilicon plant in Yulin, China, which produces polysilicon for the solar PV industry through its FBR-B reactors.
In an announcement made today, the company says the effects of the trade war and its impact on semiconductor markets have led to a sharp decline in REC Silicon’s third-quarter shipments – which is primarily a result of lower sales directly into China.
REC Silicon currently expects silicon gas sales to remain near current levels for the fourth quarter of 2019; however, the company will continue to evaluate the impacts of the trade war and market conditions on future sales and will provide additional guidance with its earnings release on Oct. 30.
Production from the Butte facility primarily serves semiconductor markets with silicon gases and semiconductor polysilicon. If an acceptable bid is received, the proceeds will be used to retire the company’s debts, to provide a buffer for contingent liabilities (tax examination and indemnity loan), and to prepare to restart production in Moses Lake – when the trade dispute with China is resolved and REC Silicon regains access to polysilicon markets in China.
Roth Capital has been retained as an advisor for the possible divestment.
