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Renewable Energy Corp’s Second Largest Owner Sells Stake

Renewable Energy Corp. ASA’s second-largest investor sold its stake to multiple buyers as the Norwegian solar-equipment producer slid in Oslo trading for a third day, struggling in an oversupplied industry.

Hafslund ASA exited its 8.93 percent holding of Sandvika-based REC by selling 69.9 million shares at 3.4 kroner apiece before market opened today and the remaining 19.1 million shares at the same price during trading, it said in statements today. REC fell as much as 15 percent today to a record 3.12 kroner in Oslo trading and was down 8 percent at 3.36 kroner as of 4:59 p.m. local time.

The sale was driven by “internal priorities” as Hafslund has “gradually downsized the venture activity and invested more heavily in the more core business,” Chief Financial Officer Finn Bjorn Reiter said by phone. The company said it is focusing on its power generation and infrastructure business.

REC, a maker of polysilicon and solar-power components, has plunged 81 percent this year as it struggled with falling product prices in an industry with overcapacity. Solar stocks are under pressure from Chinese manufacturers that have boosted factories even as demand growth slowed in the largest markets.

“It is not that big of a surprise that Hafslund is out,” Tomas Skeivys, an analyst at Terra Markets AS, said in an e-mail. “Hafslund reduced its stake in REC a couple of times and this was an attempt to go out of it completely.”

Net Gains

Hafslund said it had invested about 2 billion kroner ($350 million) in REC and had realized net gains of about 4.06 billion kroner including this morning’s sale, it said.

Holberg Fondsforvaltning AS, a Bergen-based fund manager, bought 15 million shares in the deal, portfolio manager Hogne Tyssoy said by phone. The purchase raises Holberg’s stake to about 24 million shares, making it the fourth-largest owner, according to Bloomberg data.

“This is a world class company, which today is priced at, in our opinion at least, a very attractive level,” Tyssoy said.

REC is a “cost-leader” in the production of polysilicon and silane gas and one of the best producers of silicon wafers and modules from its plant in Singapore, according to Tyssoy. The company has been “suffering under the macro fog” and uncertainties around industry subsidies, he said.

Orkla’s Stance

Orkla ASA owns almost 40 percent of REC. The Oslo-based consumer-goods manufacturer today declined to comment on Hafslund’s sale, adding that Orkla’s strategy for its holding “stands firm” and is a financial investment that will be divested, Rune Helland, head of investor relations at Orkla, said by e-mail.

“When you are a company in REC’s situation and you have an industrial shareholder controlling 40 percent that more or less has said ‘we don’t support you any more, we would just like to sell you,’ that’s the main reason why the stock price is where it is,” Tyssoy said.

Pareto Securities AS said late yesterday it was hired to explore the opportunity to sell 40 million to 95 million shares in REC. The sale would represent about 4 percent to 9.5 percent of outstanding shares in the company and the transaction will be conducted through a book building process with Pareto as sole manager and book runner. Pareto declined to comment on today’s transaction when contacted by Bloomberg News.

“At that price it’s a screaming buy,” shareholder Jens Ulltveit-Moe, who owns a 1.06 percent stake through investment company Umoe AS, said over the phone. He declined to comment on whether he bought shares as he doesn’t comment on individual transactions.

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