Norway-based Renewable Energy Corp. ASA (REC) says it will divide the company into two entities, launching the silicon and solar divisions as independent, listed companies.
According to REC President and CEO Ole Enger, dividing the company along the segment lines will place the two new entities in favorable positions for future growth.
‘Solar has become a highly competitive source of energy, and we strongly believe the solar industry will experience significant growth over the coming years,’ Enger says. ‘By launching a pure-play solar company and a pure-play silicon company, both companies will be in a favorable position for attracting capital and well equipped to streamline the market approach and stay in the forefront in terms of technology development.’
REC says launching the separate entities will be done through a financial transaction where the company offers 100% of the shares in REC Solar to the existing REC shareholders. In the transaction, REC Solar is valued at EUR 102 million, and it will apply for a listing on the Oslo Stock Exchange. REC says the solar panel company will be debt free.
After the transaction, REC ASA, which will focus exclusively on the silicon business, will hold net debt of about EUR 216 million. The transaction is pending approval by the REC shareholders and bondholders.
The announcement to launch the new solar and silicon companies coincides with REC releasing its second quarter results. Revenue from the quarter was reported at EUR 203 million, up 21% from the previous quarter. REC reported earnings before interest, taxes, depreciation and amortization of EUR 20 million in the second quarter, up from EUR 6 million in the previous quarter. The company says its second quarter performance was marked by increased demand, higher selling prices and overall improved earnings.
REC says that after a transition period, it will significantly downsize its corporate headquarters in Sandvika, Norway, with corporate functions for the solar business transferred to the new head office in Singapore while those of the silicon business will move to the U.S.
