Water Street Capital Comments On Latest Update From REC Silicon Board of Directors

Rhea-AI Summary

Water Street Capital, owning 8.26% of REC Silicon (RNWEY), has supported the Board's assessment that Hanwha Solutions Corporation's NOK 2.20 offer significantly undervalues the company's assets and intellectual property. The situation is complicated by a restrictive Transaction Agreement signed on April 24, 2025, which prevents the Board from pursuing alternative financing and strategic options.

Water Street criticizes Hanwha's behavior, particularly noting that Hanwha retracted its funding pledge after losing Board control and has threatened legal action against Board members. Water Street believes this constitutes a material breach of the Transaction Agreement under U.S. law and maintains that REC Silicon's Polysilicon and Silane gas businesses would command higher valuations if properly marketed.

Positive

• Board confirms NOK 2.20 offer undervalues company assets and IP
• Water Street Capital maintains strong 8.26% ownership position
• New Board elected by majority of shareholders is working to maximize value

Negative

• Transaction Agreement restricts Board's ability to pursue alternative financing
• Hanwha retracted funding pledge after losing Board control
• Hanwha threatens legal action against individual board members
• Company faces potential financing challenges

Board Confirms Hanwha's NOK 2.20 Offer Significantly Undervalues REC Silicon's Assets and Intellectual Property

Water Street Condemns Behavior of Hanwha Which is Preventing REC Silicon from Pursuing Alternative Financing and Strategic Options

JACKSONVILLE, Fla., July 8, 2025 /PRNewswire/ -- Water Street Capital, Inc. ("Water Street"), a long-term, value-oriented private investment firm which, together with its affiliates, collectively owns 8.26% of the outstanding common stock of REC Silicon ASA (OSL: RECSI.OL) ("REC Silicon" or the "Company"), today issued the following statement in response to the July 7, 2025 update from the Company's Board of Directors (the "Board"):

"Yesterday's announcement by the Board of REC Silicon, elected by the majority of shareholders at the Company's recent Annual General Meeting, confirms what Water Street has believed since the release of its shareholder letter on May 23, 2025: Hanwha Solutions Corporation's ("Hanwha") NOK 2.20 offer significantly undervalues REC Silicon's assets and intellectual property. However, due to the onerous restrictions outlined in Hanwha's one-sided Transaction Agreement ("TA") and its subsequent endorsement by the Company's previous Board, the new Board of REC Silicon is not given the opportunity to maximize shareholder value. 

The Board clearly states that 'The Transaction Agreement entered into on 24 April 2025 between the Company and Anchor, under Norwegian statutory law, further restricts the Board's ability to pursue alternative financing and strategic options in the current situation. Hanwha has not taken any steps to release the Board from these restrictions, but instead approached the Board and reserved the right to initiate legal action against each individual board member for failure to comply with its alleged duties.'

We find it difficult for a board to fulfill its duty to maximize shareholder value when threatened by the very shareholder responsible for placing the company into this perilous situation. That same shareholder agreed to fund the Company in the TA, only to retract that pledge when it lost control of the Board. Water Street believes that this act is a material breach of the TA under United States law.

Given the opportunity to bring the assets of REC Silicon to market, Water Street remains confident that the proper value of the Company's Polysilicon and Silane gas businesses will be ascribed. 

We commend the current Board members for their efforts in light of the burdensome restrictions put in place prior to their recent election."

Media Contact
Jonathan Gasthalter/Brandon Lin
Gasthalter & Co.
+1 (212) 257-4170
jg@gasthalter.com

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SOURCE Water Street Capital, Inc.

FAQ

What is Hanwha's offer price for REC Silicon (RNWEY)?

Hanwha Solutions Corporation offered NOK 2.20 per share for REC Silicon, which the Board has determined significantly undervalues the company's assets and intellectual property.

How much of REC Silicon (RNWEY) does Water Street Capital own?

Water Street Capital, together with its affiliates, owns 8.26% of the outstanding common stock of REC Silicon.

What restrictions does the Transaction Agreement place on REC Silicon's Board?

The Transaction Agreement from April 24, 2025 restricts the Board's ability to pursue alternative financing and strategic options, limiting their ability to maximize shareholder value.

What actions has Hanwha taken regarding REC Silicon's Board?

Hanwha has retracted its funding pledge after losing Board control and has threatened legal action against individual board members for alleged failure to comply with duties.

When was the Transaction Agreement between REC Silicon and Hanwha signed?

The Transaction Agreement was signed on April 24, 2025 between the Company and Anchor (Hanwha).