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Renewable Energy gets go-ahead to shutter REC unit under three notes
By Susanna Moon
Chicago, June 22 - Renewable Energy Corp. ASA said bondholders agreed to terminate REC Wafer Norway AS as a guarantor of three series of its notes at a meeting held Friday.
Consents were needed under the company's 11% bonds due 2014, floating-rate bonds due 2016 and 9¾% bonds due 2018 in order to shut down the subsidiary's operations.
As a result, REC Wafer will resign as guarantor under the bond loan agreements when REC ASA's banks release it from its guarantee under the current revolving credit facility or when the guarantee lapses for any reason whatsoever, according to a company notice.
REC Wafer also will be excluded from the definition of "group" in the bond loan agreements, the company noted.
As previously noted, the meeting was originally set for June 7, but there was an insufficient number of holders to form a quorum for the 11% notes and floaters. As a result, the meeting was adjourned until June 22.
At the June 7 meeting, the proposal received 100% of the votes from holders of the floaters and 96.67% of votes from holders of the 11% bonds, but the bond agreement remained unchanged. The holders were summoned on May 22.
As reported, the company decided to stop production on April 24, and the subsidiary will continue operating until June 30.
To pass the measure, holders of at least half the bonds had to vote in favor of it and there had to be a quorum of at least half of the bonds represented at the meeting.
Because REC Wafer is a guarantor of the notes, the consent of holders was needed to close the company's operations.
In a separate press release, the company said it also began soliciting consents to amend its outstanding €320 million of 6.5% subordinated unsecured convertible bonds due 2014.
Renewable Energy is a Sandvika, Norway-based company active in the solar energy sector.
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