Make REC Great Again!

Over the past couple of years, over one billion dollars in shareholder value have been wiped out. Whether this collapse was due to incompetence, self-interest, or deliberate coordination between the Hanwha-controlled board and management remains unclear, but the outcome is indisputable. Thousands of minority investors have suffered devastating losses, and Norwegian taxpayers will indirectly bear the cost through capital loss deductions.

At the center of this collapse lies a ten-year, USD 3 billion “take-or-pay” polysilicon agreement between REC Silicon and Hanwha Qcells, a company also controlled by Hanwha. This contract was the very reason REC pushed for an accelerated restart of the Moses Lake facility, investing hundreds of millions in upgrades and staffing.

We’ve been told the agreement reportedly contained a “deliver-or-pay” clause – not just “take-or-pay” as publicly communicated. This meant REC could face massive penalties if it failed to deliver, regardless of whether Hanwha Qcells was ready or willing to purchase. A competent, independent board would never have accepted such an asymmetrical and high-risk clause given the uncertainties surrounding the plant’s restart after years of shutdown.

Even worse, this clause was never disclosed to shareholders. REC management and the board consistently presented the agreement as a straightforward “take-or-pay” deal, a guaranteed revenue stream, not a trapdoor. In reality, the “deliver-or-pay” structure shifted nearly all risk onto REC.

In September 2024, everything seemed on track. REC Silicon reported that impurities in the first ultra-high purity polysilicon shipment from Moses Lake had been reduced to acceptable levels, the plant was running well, and final customer qualification was underway which was said to be standard procedure and appeared almost merely as a formality.

Then a month later came the turning point. The entire future of Moses Lake, and the USD 3 billion contract, was suddenly said to hinge on a single quality test of polysilicon. Under what can only be described as highly irregular circumstances, this material was reportedly shipped to China for testing, held in customs for months, with no independent oversight, insurance, or transparency about the regarding the testing process.

When that test allegedly “failed,” in December 2024, Hanwha moved immediately to terminate the contract, claiming non-performance. Overnight, the long-term offtake deal that had justified REC’s massive investments evaporated. Within days, production at Moses Lake was halted, employees were dismissed, and Hanwha, sitting on both sides of the table, walked away unscathed. Just days later, Hanwha had a new agreement ready with the Malaysian silicon company OCI Holdings.

This supports the hypothesis that Hanwha had long intended to exit the so called “take-or-pay agreement”, as the contracts were signed when silicon prices were at a very different level than they are today. By leveraging the series of events described above, including the alleged test “failure,” the rushed termination of the contract, and the rapid switch to an alternative supplier, Hanwha effectively sabotaged the company to free itself from the agreement.

This claim is further reinforced by witness testimony collected by Water Street Capital’s attorneys in ongoing U.S. legal proceedings. Former employees of REC Silicon’s Moses Lake facility consistently testified that Hanwha deliberately sabotaged operations. Hanwha personnel took control of daily production, overrode REC Silicon’s experts, and constantly changed equipment and processes to destabilize the plant. Witnesses also explained that Hanwha kept moving the purity standards so the facility could never meet them, and even sent a polysilicon sample to China without proper annealing – virtually ensuring contamination and test failure.

Then came the June 2025 General Meeting, where frustrated shareholders mobilized and successfully voted in a new, independent board – a rare victory for corporate democracy. But what these directors could not have known was the extent to which Hanwha had already tied their hands through a “Transaction Agreement” that prevented REC from seeking external financing or exploring competing offers while Hanwha’s voluntary offer was ongoing.

When the new board attempted to fulfill its duties, Hanwha responded with intimidation and threats.

“Hanwha has not taken any steps to release the Board from these restrictions,” the board wrote on July 7, 2025, “but instead approached the Board and reserved the right to initiate legal action against each individual board member for failure to comply with its alleged duties.”

In plain terms: Hanwha threatened to personally sue the independent board members unless they followed orders. Within weeks, Hanwha forced an Extraordinary General Meeting and reinstalled its own representatives in July 2025, reasserting total control and crushing the independence shareholders had just restored.

Meanwhile, the Hanwha‑controlled management has done nothing to refinance or stabilize the company. Instead, they have used shareholders’ money – our money – to fight an investigation supported by more than 37 percent of all shares, amounting to roughly 158 million shares voted at the aforementioned June general meeting. What are they trying to hide?

Through their lawyers, REC exploited a loophole when Water Street Capital, an 8% owner of REC Silicon and the party that had filed the original investigation request, sold its stake in the mandatory offer in August, which effectively ended the investigation request without the court addressing the subjects of investigation.

We have already gathered 5% of all shares in the company and have now submitted a formal request to the board and management of REC Silicon demanding an Extraordinary General Meeting and calling for a new investigation.

We are eager to see whether REC will adhere to the rules and convene an EGM, or whether they will start disputing and creating obstacles, as their track record does not suggest a strong consideration for shareholder interests.

We are also engaging legal counsel and creating a shared fund to cover the necessary costs. All participants will be represented collectively in any subsequent proceedings or negotiations. Should Hanwha seek to buy out minority shareholders, the price must reflect the company’s true underlying value – not the insulting levels previously proposed.

Our message to Hanwha and the REC Silicon board is simple: Treat all shareholders equally, restore transparency, and respect Norwegian law or step aside and let someone capable and committed take over.

At the same time, we call upon Norwegian regulators, policymakers, fellow shareholders, and the media to ensure that accountability is upheld and that corporate governance standards are not undermined by conflicts of interest.