REC Silicon sells last remnants of Moses Lake polysilicon

• The Norwegian firm mothballed its Washington State facility greater than a year ago as well as is currently reliant on semiconductor-grade poly as well as silane gas generated at its fab in Butte, Montana-- a center for which business claims it has received plenty of interest from possible buyers.

Norwegian polysilicon and also silane gas company REC Silicon ASA is fast approaching its effective exit from the solar market after revealing in its second-quarter update it had liquidated the last 62 MT of PV-grade poly created at its plant in Moses Lake, Washington, which has actually been shuttered for over a year.

The import tasks applied on U.S.-made polysilicon by the Chinese authorities which have actually successfully closed REC out of the globe's largest market motivated the company to shut its Moses Lake fluidized bed reactor facility in the second quarter of last year. Therefore, the firm's solar products division generated revenue of only $300,000 in the April-to-June home window as it contributed a $2.3 million struck to revenues before rate of interest, tax, devaluation as well as amortization, following a $2.8 million deficit to the bottom line in the first 3 months of the year.

The only solar-grade poly generated by REC Silicon throughout the second quarter came, paradoxically, through its 15% stake in a joint venture based in China, with that said fab manufacturing 1,063 MT of fluidized bed activator product plus 19 MT of Siemens polysilicon. A $4.7 million settlement owed by REC Silicon to the JV has been pushed back up until late this year, according to the financial update launched by REC on July 23.

China-U.S. trade offer

The much-heralded Phase I Trade Agreement worked out in between the Trump administration and also China in January consisted of a commitment by the last to acquire U.S. polysilicon yet the onset of Covid-19 on U.S. dirt-- and succeeding break down in connections between The White House and also Beijing-- have made that twinkle of wish for REC Silicon increasingly appear to have actually been a false dawn.

The Norwegian company is now progressively dependent on the polysilicon it produces for the semiconductor sector and the sale of silane gas, with both products generated at its various other fab, in Butte, Montana. However, even that remnant of manufacturing activity could be intimidated, with REC Silicon revealing a lot of interest from possible suitors in acquiring the facility. The hold-up to the due persistance procedures which would certainly foreshadow any type of sale of the site, brought on by Covid-19 interruption, may be all that is keeping REC from remaining to make on U.S. dirt presently.

The firm chose to get an $8.3 million coronavirus aid, alleviation and economic security (CARES) car loan from the U.S. federal government, that included $4.4 million set aside to its solar materials company. That support, granted under the Payroll Protection Program, however, connects the company right into maintaining its present headcount as well as wage degrees on pain of needing to repay the lifeline.

Stuck between

The business continues to be at the mercy of the governments of China and also the U.S. with 3 ever-present historical risks towering above it: An indemnity financing related to the personal bankruptcy of a previous subsidiary in 2012, in regard to which it has refused a claim obtained last year for NOK150 million ($16.4 million); a pending real estate tax reassessment by Grant County, Washington related to 2012, upon which assessments for 2013 and also 2015 are contingent; and a Norwegian Central Tax Office reassessment for 2009-11.

It is perhaps not unexpected the business opted versus releasing any kind of assistance for the present quarter or the full-year, pointing out Covid-19 unpredictability as the reason.