In terms of debt, the company has successfully restructured existing debt and is adding new credit lines, including a bond issue, which in total are expected to amount to NOK 3 – 5 billion. REC has engaged DnB NOR Markets, Nordea and SEB as Joint Lead Arrangers for the bond issue. Offering a REC-bond to the financial market is in line with the strategy to diversify the company’s sources of funding.
REC has also received an offer to revise financial covenants under the existing debt facilities.
In terms of equity, REC intends to complete an equity offering through issuance of new shares to raise approximately NOK 4 billion. The proposed equity offering will be conducted as a fully underwritten rights issue, to facilitate equal treatment of REC’s more than 25,000 shareholders. The rights issue will, subject to certain conditions, be fully underwritten by REC’s main shareholders Orkla/Elkem and Hafslund (with a percentage corresponding to their respective ownership interest) and other shareholders including Folketrygdfondet (together representing about 60 percent of outstanding shares), and a bank syndicate including DnB NOR Markets (acting as Global Coordinator and Joint Bookrunner), Nordea, ABN AMRO and BNP Paribas (acting as Joint Lead Managers and Bookrunners). Freely tradable subscription rights will be applied for listing on the Oslo Stock Exchange.
“Contact with our shareholders has indicated that our owners are highly supportive of the company taking action to ensure our long-term financial flexibility. Through new equity and significantly improved credit lines, we have taken the necessary steps to secure long-term financing of our ongoing capital expenditure program and provided a foundation for developing potential opportunities in a growing industry”, says Ole Enger, President and CEO.
REC will call for an extraordinary general meeting (“EGM”) to be held on June 5, 2009 to resolve the rights issue. According to the current timetable, and subject to approval by the EGM, the subscription period for the rights issue and the period for trading of subscription rights are expected to commence on or about June 12, 2009 and end on or about June 26, 2009. The company’s shares are expected to be traded exclusive of subscription rights from and including June 8, 2009.
Terms of the rights issue, including the subscription price and the number of shares to be issued, will be proposed by the Board of Directors and are expected to be announced on or about June 5, 2009. The company will also prepare and publish a prospectus for the rights issue, which will be subject to approval by the Oslo Stock Exchange prior to publication.