Renewable Energy begins repurchase offer for three series of bonds

By Susanna Moon

Chicago, Oct. 21 - Renewable Energy Co. ASA said it began its previously proposed repurchase offer for its senior bonds REC01 maturing in 2014, REC02 maturing in 2016 and REC03 maturing in 2018.

The company will redeem some of the bonds at the following purchase prices:

• Up to 100% of the REC01 bonds at 103% of par;

• Up to 67% of the REC02 bonds at par; and

• Up to 67% of the REC03 bonds at par.

The offer will run until 11 a.m. ET on Oct. 31, with allocation expected to be communicated by the end of business on Nov. 1, according to a company press release.

The offer is conditioned on completion of the equity offering and the listing of REC Solar ASA.

Arctic Securities (+47 2101 3191 or email fabian.qvist@arcticsec.no) is the advisor and receiving agent.

The company said on Aug. 23 that it improved the offer, increasing the repurchase amounts from the 60% of the REC01 bonds and 40% of the REC02 bonds and REC03 bonds.

The company had set a meeting for the REC01, REC02 and REC03 bondholders on Aug. 27, and holders were to vote on the proposed split of the company, as previously reported.

The bond repurchase offer was conditioned on the company's plans to separate its silicon and solar divisions.

More on background

The repurchases will reduce the company's net debt to about NOK 1.7 billion from NOK 2.2 billion and the 2014 interest payments to about NOK 100 million, according to a press release on Aug. 23.

After the repurchases, the remaining 2014 debt maturity is about NOK 635 million. This will be addressed through available cash, cash flow from operations, issuing of new bonds, a bank credit facility, sale of non-core assets or raising new equity, the company said.

The company has been in the process of restructuring and refinancing the group in order to obtain a better capital structure with reduced debt, lower interest costs and prolonged maturities, the release noted.

Since the peak in 2010, net debt has been reduced by NOK 9.4 billion to NOK 2.2 billion at the end of the second quarter 2013. Annual interest payments are down from NOK 900 million per year in 2010 to about NOK 300 million in 2013.

Renewable Energy is a provider of solar electricity services based in Sandvika, Norway.

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