REC to Buy Back Bonds, Sell Debt, Shares to Ease Funding Strain

Renewable Energy Corp ASA plans to buy back 160 million euros ($208 million) of convertible bonds and sell new shares and debt to extend maturities and ease strain on its balance sheet.

REC, based in Sandvika near Oslo, has mandated Arctic Securities ASA to manage the repurchase and exchange offer, it said in a statement today. The company will repurchase as much as 160 million euros of its convertible bond maturing in 2014 and tap two bonds to raise as much as 426 million kroner ($73.3 million), it said.

On the condition that the bond buyback is successfully completed, REC will also sell 200 million new shares, it said. The price will be determined by an accelerated book-building, the company said.

“Significant orders in the convertible bond repurchase offer have been received from certain holders of convertible bond units,” REC said, without giving names. The acceptance for the repurchase offer expires at 5:30 p.m. local time today.

REC, like European peers Solarworld AG and Q-Cells SE, is under pressure from Chinese rivals that expanded capacity just as demand slowed, causing solar-wafer and cell prices to plunge. Cuts in renewable-energy subsidies in France, Italy and Germany also hit sales.

Shares in REC jumped 8.1 percent to 1.86 kroner in Oslo at the 4:30 p.m. close in Oslo. The share is up 74 percent this year, after slumping for five straight years.

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