By Reliance Industries Ltd announced on Monday its decision to sell REC Solar Norway AS to Oslo-listed Elkem ASA for approximately USD 22 million. REC Norway, a wholly-owned subsidiary of REC Solar Holdings, is primarily engaged in the manufacturing of kerf-based polysilicon in Norway.
Background and Share Purchase Agreement
In October 2021, a unit of Reliance Industries acquired Norway’s solar panel manufacturer with an enterprise value of USD 771 million, as part of its strategy to expand its presence in alternative energy sectors. According to a stock exchange filing by RIL, REC Solar Holdings AS, a step-down wholly-owned subsidiary, entered into a share purchase agreement with Elkem ASA for the sale of its entire equity stake in REC Solar Norway AS.
Elkem ASA, established in 1904, is a leading provider of silicon-based materials and is listed on the Oslo Stock Exchange.
Business Operations and Financial Details
REC Norway specializes in the production of kerf-based polysilicon in Norway. Despite the sale, Reliance Industries will retain the technology and intellectual property rights related to kerf-based polysilicon. In the calendar year 2022, REC Norway recorded a turnover of Norwegian krone 1.1 billion and had a net worth of NOK 0.3 billion as of December 31, 2022. These figures contributed approximately 0.08% and 0.03% respectively to RIL’s annual consolidated turnover and net worth for the financial year 2022-23.
Strategic Expansion and Green Energy Initiatives
Reliance Industries’ acquisition of REC Solar Holdings in 2021 aimed to bolster its presence in global green energy markets, including the US, Europe, Australia, and Asia. This acquisition aligns with Chairman Mukesh Ambani’s commitment to invest USD 10 billion in green energy over three years. REC Solar Holdings specializes in the production of solar-grade polysilicon and solar panels, with manufacturing facilities in Norway and Singapore.
Expected Completion and Subsidiary Status
The transaction involving REC Solar Norway is subject to regulatory approvals and customary closing conditions and is anticipated to be finalized by April 2024. Upon completion of the sale, REC Norway will cease to be a subsidiary of Reliance Industries. However, REC Solar Holdings AS and its subsidiaries, engaged in the manufacturing and sale of solar PV HJT cells and modules, will remain subsidiaries of RIL.
