REC ASA - Launching EUR 300 million convertible Bond
(Thomson Reuters ONE) - Sandvika, October 2, 2009, REC today announces that it intends toissue a EUR 300 million convertible bond (the "Bonds") toinstitutional investors, due in June 2014.REC today announces that it intends to issue a EUR 300 millionconvertible bond, with an upsize option of EUR 50 million. Thesubordinated unsecured convertible bonds will be convertible into newordinary shares of REC. The Bonds are expected to have a coupon ofbetween 6.0 - 6.5 percent payable quarterly in arrear, commencing inJanuary, 2010.The conversion premium is expected to be between 30 - 35 percent overthe volume weighted average price of REC's shares on the Oslo StockExchange from the time of launch until the time of pricing. The Bondswill be issued and redeemed at 100 percent of the principal amount,the maturity date is June 4, 2014. REC shall have the right toconvert the Bonds into ordinary shares at any time on or afterJanuary 4, 2013, provided that the value of the underlying shares onthe Oslo Stock Exchange (translated into EUR) on at least twentytrading days within a period of thirty consecutive trading days hasexceeded 150 percent of the principal amount of the outstandingBonds. The Bonds will not be listed initially, but REC may decide tolist the Bonds at a later time.The proceeds from the Bonds ensure further financial robustness andflexibility for the REC Group, and will be used for general corporatepurposes. Final terms are expected to be determined and announced onor about October 2, 2009, and the Bonds are expected to be settled onor about October 13, 2009.REC has received confirmation from its bank syndicates to the effectthat the subordinated convertible bond loan will not be counted asdebt under the gearing ratio covenants in REC existing loanagreements, and thus improves the capital structure.Deutsche Bank AG has acted as co-ordinator in respect to the offeringof the Bonds and REC has appointed BNP PARIBAS, BofA Merrill Lynchand Deutsche Bank AG as Joint Bookrunners and Joint Lead Managers.Commerzbank and Arctic Securities are appointed as Co-Managers.In context of the convertible bond issue, REC wishes to make thefollowing trading update (please refer to the second quarterreport/presentation for more detailed guidance on the third quarterand full year 2009):Regarding REC Silicon: Silicon III is currently undergoing commercialramp-up and there is presently no change to the already communicatedramp-up schedule. REC has not made any formal adjustments to thealready communicated production target, but reiterates that reachingthe full year 2009 production targets remain challenging. Theexperience with the FBR technology to date remains positive and thepotential of the process and the quality of the product have beenconfirmed.Regarding REC Wafer: As previously reported, REC has been engaged indialogue with its customers to assist them in coping with the effectsof the market downturn. In most cases, REC and its customers havebeen able to find solutions for 2009 that are commercially acceptablefor both parties. It is likely that the present weak market willcontinue in 2010, and it is therefore in RECs best interest to makeadditional contractual adjustments related to 2010. Such adjustmentswill have an adverse effect on EBITDA for the relevant period. Duringthird quarter, and as previously communicated, REC Wafer hasgradually increased the production capacity utilization.Regarding REC Solar: Although the market has started to demandadditional volumes of modules for delivery in the second half of2009, prices still remain under pressure. REC Solar's sales pricesfor solar modules for the whole year of 2009 are on average expectedto be down by approximately 35 percent compared to the average of2008. In the second half of August, and as previously communicated,REC Solar has returned to full module production and cell productionwill be aligned to the internal need for solar cells.Regarding Sovello: As previously communicated, Sovello was not incompliance with all its financial covenants at the end of 2008, andcurrently operates under a grace post the September-end waiverexpiration date. REC expects that the current process of extendingthe waiver to the end of November will be successful, and willcontinue to work towards finding a longer-term financing solutiontogether with the other owners of Sovello and the Sovello banksyndicate.Regarding the Singapore Project: The project continues to trendtowards a lower capital expenditure compared to the initialinvestment case, reflecting a less heated construction market. RECstill expects the new plant to be more cost competitive than REC'sexisting facilities, and ramp-up is expected to start in the firsthalf of 2010. REC is now preparing the operational organization forstart of production, and the ramp-up is expected to be aligned tomarket demand and prudent working capital management.On financing, REC successfully concluded its rights issue in July2009. Subsequently, REC has also completed the issue of a 5-yearfixed rate bond loan in the Norwegian bond market. The bond loan paysa fixed spread of 690 basis points, and has maturity on September 16,2014. REC has also received a committed term sheet for a NOK 1,490million term loan from Eksportfinans and is currently negotiating theloan agreement. The Board is on a continuous basis monitoring thecapital structure and potential additional funding needs for theCompany.NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PARTDIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA, HONG KONG, SOUTHAFRICA, JAPAN OR THE UNITED STATES:Certain statements contained herein that are not statements ofhistorical fact, may constitute forward-looking statements.Forward-looking statements involve known and unknown risks,uncertainties and other factors that could cause the actual resultsor events concerning the Company to be materially different from thehistorical results or from any future results expressed or implied bysuch forward-looking statements. Although REC has attempted toidentify important factors that could cause actual events or resultsto differ from those described in forward-looking statementscontained herein, there can be no assurance that the forward-lookingstatements will prove to be accurate as actual future events coulddiffer materially from those anticipated in such statements. Exceptas may be required by applicable law or stock exchange regulation,REC undertakes no obligation to update publicly or release anyrevisions to these forward-looking statements to reflect events orcircumstances after the date of this document or to reflect theoccurrence of unanticipated events.This press release is for information purposes only and does notconstitute or form part of, and should not be construed as an offeror an invitation to sell or issue, or the solicitation of any offerto buy or subscribe for, any securities. In connection with thistransaction there has not been, nor will there be, any publicoffering of the Bonds. No prospectus will be prepared in connectionwith the offering of the Bonds. The Bonds may not be offered to thepublic in any jurisdiction in circumstances which would require RECto prepare or register any prospectus or offering document relatingto the Bonds in such jurisdiction. The distribution of this pressrelease and the offer and sale of the Bonds in certain jurisdictionsmay be restricted by law. Any persons reading this press releaseshould inform themselves of and observe any such restrictions.This press release does not constitute an offer to sell or asolicitation of an offer to purchase any securities in the UnitedStates. The securities referred to herein (including the Bonds andthe shares of REC) have not been and will not be registered under theU.S. Securities Act of 1933, as amended (the "Securities Act") or thelaws of any state within the U.S., and may not be offered or sold inthe United States, except in a transaction not subject to, orpursuant to an applicable exemption from, the registrationrequirements of the Securities Act or any state securities laws. Thispress release and the information contained herein may not bedistributed or sent into the United States, or in any otherjurisdiction in which offers or sales of the securities describedherein would be prohibited by applicable laws and should not bedistributed to United States persons or publications with a generalcirculation in the United States. No offering of the Bonds is beingmade in the United States.This press release is only being distributed to and is only directedat (i) persons who have professional experience in matters relatingto investments falling within Article 19(1) of the Financial Servicesand Markets Act 2000 (Financial Promotion) Order 2005 (the "Order")and (ii) high net worth entities falling within Article 49(2) of theOrder and (iii) persons to whom it would otherwise be lawful todistribute it (all such persons together being referred to as"relevant persons"). The Bonds are only available to, and anyinvitation, offer or agreement to subscribe, purchase or otherwiseacquire such Bonds will be engaged in only with, relevant persons.Any person who is not a relevant person should not act or rely onthis press release or any of its contents.Stabilization/FSAFor more information, please contact:Jon André Løkke, SVP and Investor Relations Officer, +47 907 44 949About RECREC is the leading vertically integrated player in the solar energyindustry. REC Silicon and REC Wafer are among the world's largestproducers of polysilicon and wafers for solar applications. REC Solaris a rapidly growing manufacturer of solar cells and modules, and arealso engaging in project development activities in selected segmentsof the PV market. REC had revenues of NOK 8 191 million and anoperating profit of NOK 2 529 million in 2008. Close to 3 000employees work in REC's worldwide organization. Please also seewww.recgroup.com.This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 02.10.2009 - 07:47 Uhr
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