Renewable Energy Corp. Rises in Oslo on Chinese Subsidies, U.S. Solar Loan
Renewable Energy Corp. ASA, the Norwegian maker of solar energy components, advanced after a Chinese province set a power purchase price for solar plants and the U.S. announced loan guarantees for the industry.
REC rose as much as 7 percent to 15.77 kroner, its biggest gain since June 15, and traded at 15.33 kroner at 1 p.m. in Oslo. The stock has slumped 59 percent this year, valuing the company at 15 billion kroner ($2.3 billion).
President Barack Obama on July 3 announced $1.85 billion in loan guarantees to Abengoa SA of Spain and Abound Solar Inc. to build sun-powered facilities in the U.S. The eastern China province of Shandong, meanwhile, set a purchase price of 1.7 yuan (25 cents) a kilowatt-hour for photovoltaic power plants for 2010, the government said on its website.
“Obama announced around $2 billion to solar companies in loan guarantees, this has lifted the whole sector, and Chinese subsidies for the solar industry were approved,” Tomas Skeivys, a Vilnius, Lithuania-based analyst with Terra Markets who has a “buy” recommendation for REC, said by phone. “The stock has been really weak recently so it’s a rebound candidate.”
REC, Sandvika, Norway-based, said in March it will issue 4 billion kroner in new equity to help fund 25 billion kroner in investments as it expands production of modules, wafers and cells to meet demand for energy that doesn’t emit carbon dioxide. Declining prices and lower demand for its products in an industry facing overcapacity has hurt earnings. A polysilicon plant in Moses Lake, Washington, also faced delays.
Chief Executive Officer Dag Opedal of Orkla ASA, which owns a 40 percent stake in REC, said July 2 he will step down while retaining his role as chairman of REC. Orkla may sell its stake in REC after the stock’s disappointing performance, the Norwegian newspaper Aftenposten on July 3, cited Orkla Chairman Stein Erik Hagen as saying.
“Nothing’s been decided, it’s a possibility,” Hagen said in an Oslo interview today regarding the sale of the REC stake.