Initiative for Minority Shareholders in REC Silicon
Note that this initiative is independent of this website in general, and thus not responsible for other content.
Join the initiative without any obligations by filling in this form
We are a group of 10-15 Norwegian and international shareholders in REC Silicon, united to safeguard our own and other minority shareholders' rights. We have a long-term investment perspective, with several members holding shares for over a decade. For strategic reasons, we choose not to disclose the total number of shares we own.
Background
In 2022, the Korean Hanwha Group acquired 33.33% of the shares in REC Silicon. In September 2023 , a Hanwha subsidiary entered into an agreement to purchase all polysilicon (16,000 MT) from REC’s Moses Lake facility. This agreement included an offtake mechanism with minimum prices. The agreement spans ten years but guarantees pricing only for the first five years.
These agreements were signed by what are described as independent board members. However, at the 2024 General Meeting, two of the five board members were employees of the Hanwha Group. During the 2023 General Meeting, two Hanwha employees were elected to the nomination committee, which subsequently proposed the "independent" board members elected in 2024.
Events in 2024
At the beginning of 2024, various quality issues in product deliveries were reported, resulting in changes to the specifications in the agreement between REC and its customer. In September, the company announced positive laboratory results for polysilicon produced at Moses Lake, pending further testing at a location chosen by the customer. In October, the product was delayed in customs in an unspecified country.
In November, REC received a short-term loan from its main shareholder. Mid-November, the product was released from customs, but on December 17, the company announced that the product had failed testing. On December 30, REC announced the suspension of polysilicon production at Moses Lake, citing the main shareholder’s unwillingness to wait further. On January 2, it was revealed that Hanwha had entered into an agreement with Malaysian OCI to purchase polysilicon.
What Now?
The sequence of events appears to be a "black box," where we as shareholders have not received adequate information or answers to our inquiries to investor relations, management, or during quarterly presentations.
We will demand an Extraordinary General Meeting (EGM) to investigate the following:
- Equal treatment of shareholders and compliance with disclosure obligations: Assessment of the company’s practices and adherence to the principle of arm’s-length dealings in agreements and decisions. This includes examining potential asymmetric access to information between Hanwha and minority shareholders.
- Appropriate use of shareholder funds: Review of decisions related to investments, agreements, and operations at Moses Lake, including an assessment on whether any of the company’s actions during this period can be as assessed as liability-inducing dispositions to the detriment of the minority shareholders.
We are confident that we can gather sufficient support to succeed with points 1 and 2, as this requires 5% and 10% of shares, respectively. We also have the capacity to block any potential delisting of REC Silicon. At the EGM, we will propose the election of new board members to represent minority shareholders’ interests. This requires a majority vote at the general meeting and is more challenging.
Our Ambition
Our goal is for REC Silicon to protect the interests of minority shareholders and recognize that we, collectively, can represent a majority. We aim to prevent:
- Undervalued takeover bids.
- Fire sales of assets.
Additionally, we will work to ensure that the true value of Moses Lake/Butte becomes visible.
How You Can Contribute
- Join the initiative without obligation by filling in this form. The data is handled as confidential and is received and visible for only one person.
- Exercise your shareholder rights.
- Contact the media and authorities to raise awareness.
- Utilize relevant communication platforms.
We will provide further updates. Together, we can safeguard our interests as REC Silicon shareholders.
