REC Silicon ASA: A Crucial Juncture in Corporate Governance and Valuation

In the dynamic world of semiconductors and solar technology, REC Silicon ASA finds itself at a pivotal moment. The company, known for its production of solar grade polysilicon, is currently navigating through significant corporate governance challenges and valuation disputes. Here’s a closer look at the unfolding events that are shaping the future of REC Silicon.

Corporate Governance Shake-Up

On June 11, 2025, Water Street Capital, Inc., a value-oriented investment firm holding an 8.26% stake in REC Silicon, announced a bold move to nominate a slate of independent directors to the company’s board. This initiative underscores Water Street’s belief that urgent changes are necessary to preserve REC Silicon’s independence and enhance shareholder value. The proposed directors bring a wealth of experience from industry, management, and legal backgrounds, aiming to steer the company towards a more prosperous future.

Water Street’s announcement comes amid concerns over the current board composition, which includes several executives from Hanwha, a major shareholder. This has raised potential conflicts of interest, especially in light of Hanwha’s recent actions. The South Korean conglomerate’s plan to purchase all shares of REC Silicon has been met with resistance, with Water Street arguing that the offer undervalues the company’s assets and intellectual property by more than 90%.

Valuation Dispute

The crux of the dispute lies in Hanwha’s proposed share purchase price of NOK 2.20, which Water Street and other stakeholders believe drastically undervalues REC Silicon. This valuation issue is compounded by Hanwha’s termination of a 10-year purchase agreement with REC Silicon, raising concerns about the company’s future commercial relationships and operational stability.

Water Street’s nominees, including industry veteran Dave Keck, who successfully renegotiated $1.1 billion in debt at GT Advanced Technologies, are poised to bring diverse expertise to the board. Their goal is to address these valuation concerns and ensure that REC Silicon’s strategic direction aligns with the best interests of all shareholders.

Looking Ahead

As REC Silicon approaches its upcoming annual general meeting, shareholders are urged to support Water Street’s director nominees. The outcome of this corporate governance battle could significantly impact the company’s trajectory, potentially unlocking greater value for its stakeholders.

In conclusion, REC Silicon ASA stands at a crossroads, with its future hinging on the resolution of these governance and valuation challenges. The decisions made in the coming weeks will be crucial in determining whether the company can capitalize on its strengths in the solar and electronics industries or if it will succumb to undervaluation and strategic misalignment.