REC Silicon running out of road on takeover bid by Hanwha

July 7, 2025
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The offer period for Hanwha’s proposed share buyout of REC Silicon ends tomorrow, 8 July. Image: REC Silicon

The board of Norwegian silicon producer REC Silicon is close to accepting a buyout offer by its largest shareholder, Hanwha Group, as it runs out of options to escape its financially precarious situation.

When the offer was first made in April, it was described by minority shareholders as “lowball”, but in a statement today the REC Silicon board said it was unable to recommend any alternatives to the Hanwha offer, which is due to run out tomorrow, 8 July.

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Hanwha’s April offer proposed buying all of REC Silicon’s outstanding shares at NOK2.2 (US$0.21) per share through a newly established company called Anchor AS. Hanwha is currently REC Silicon’s largest shareholder with around a one-third holding.

The buyout offer followed the termination of a silicon supply deal earlier this year between REC Silicon and Hanwha’s subsidiary, the module manufacturer QCells, due to concerns over the quality of REC’s product. This prompted REC Silicon to abandon operations at its Moses Lake facility in the US and has left the company in a financially precarious position, reliant on loans from Hanwha.

But Hanwha has faced pushback from a group of minority shareholders in REC Silicon led by the hedge fund Water Street Capital, who questioned its motivations in cancelling the polysilicon supply deal and have subsequently resisted the buyout offer.

In a development last month, the group succeeded in wresting control of the process when it voted in favour of an investigation into the termination of the supply deal. The REC board was also reformed, with a number of new appointees not affiliated with Hanwha winning seats, including the appointment of WS Capital’s John Adams as chair.

But in a statement from the REC Silicon board today, it appears efforts to resist Hanwha’s takeover bid are faltering.  

The statement highlighted the ongoing financial difficulties REC Silicon is facing due to Hanwha’s refusal to provide the company with any further loans unless the offer is completed:

“The Board has taken steps to assess the current financial situation of the Company and has confirmed that the Company is in need of additional financing. As part of this process, the Board has held discussions with an investment bank to assess alternative financing solutions given that Hanwha has declared that it will not provide any further loans to the Company. To the Board’s understanding, existing loans and financing to the Company have effectively encumbered most or all of the Company’s assets, consequently making alternative avenues of additional financing difficult.”

In the statement, REC maintained its position that the Hanwha offer was too low but said it had been unable to negotiate a higher offer. As a result, REC Silicon said it was unable to recommend any alternatives to Hanwha’s offer.

“Based on the above, including the Company’s critical financial situation with no realistic and available financing alternatives to the continued financing from Hanwha, limited time available, and legal constraints on the Board’s ability to pursue alternative financing and strategic alternatives, the Board is unable to recommend any alternatives to the Offer. As part of this assessment, the Board assumes that Hanwha will honor its previous statements that it intends to financially support the Company’s operations.”

Adams made no further comment on the situation when contacted by PV Tech.

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