#USA #Jacksonville #Water Street Capital #REC Silicon #Hanwha Solutions

Water Street Capital Takes Action Against Hanwha's Proposal

On May 23, 2025, Water Street Capital, Inc., a private investment firm focused on long-term value, issued a significant open letter to the shareholders of REC Silicon ASA. This letter expressed strong reservations about Hanwha Solutions Corporation's proposed acquisition of all outstanding shares of REC Silicon, which they allege substantially undervalues the company's assets and intellectual property. Water Street, which currently holds 8.26% of REC Silicon's common stock, voiced its intention to vote against the acquisition proposal put forth by Hanwha, highlighting their belief that the offer inadequately represents the real value of the company.

The context of this dispute lies within Hanwha's recent termination of a decade-long purchase agreement with REC Silicon, which had been in place since December 2024. This agreement was intended to facilitate Hanwha's acquisition of all polysilicon produced at REC's facility located in Moses Lake. The abrupt termination of this contract raised questions, prompting Water Street to demand further investigation into the circumstances that prompted Hanwha to withdraw from such a significant contract.

In the open letter, Water Street Capital outlined its plans to convene an Extraordinary General Meeting (EGM) to explore the reasons behind Hanwha's decision. They believe that understanding the rationale for the termination is vital for all stakeholders involved, particularly to gauge the financial health and future prospects of REC Silicon. The firm indicates that its actions are not just rooted in safeguarding its investment but also in ensuring that all shareholders are made privy to critical information concerning the company's trajectory.

Moreover, Water Street announced its intention to nominate new directors to the board of REC Silicon at the upcoming Annual General Meeting (AGM). This move is aimed at preserving the independence of REC Silicon and ensuring that the firm’s interests are adequately represented. Water Street’s leadership sees the current board's alignment with Hanwha's interests as potentially detrimental to the long-term viability of REC Silicon if steps are not taken to reinforce independent oversight and direction.

This unfolding situation highlights a growing tension in corporate governance and shareholder activism, particularly as it relates to recovering value in depressed market conditions. As the energy sector increasingly scrutinizes supply chains and efficiency in production, companies like REC Silicon have become focal points of attention for investors keen on maximizing returns and ensuring equitable practices in corporate conduct.

The stakes have been raised as the REC Silicon community approaches its AGM, where shareholders will be forced to weigh the proposals put forth by both Water Street Capital and Hanwha. With the valuation dispute at the forefront, the upcoming decisions will set significant precedents regarding shareholder influence, corporate strategy, and stakeholder engagement in the tech sector's rapidly evolving landscape.

In conclusion, Water Street Capital's recent activity serves as a clarion call for greater transparency and accountability within REC Silicon as it navigates this tumultuous phase. The investment firm seeks not only to safeguard its interests but also to advocate for the broader shareholder community’s right to voice concerns and influence crucial governance issues.

As this story develops, it will undoubtedly attract attention from industry analysts and investors alike, hoping to glean insights into effective shareholder strategies and the ever-changing dynamics between public companies and their investors.