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

Water Street Capital Comments on REC Silicon's Board Update

In a recent statement, Water Street Capital, Inc. has voiced its concerns regarding the recent update from the Board of Directors of REC Silicon ASA. The firm, which holds 8.26% of outstanding shares in REC Silicon, criticized Hanwha Solutions Corporation for undervaluing the company's assets and preventing it from exploring potential alternatives for financing.

Water Street argues that Hanwha's offer of NOK 2.20 per share does not reflect the true worth of REC Silicon's extensive assets and intellectual property. This assertion supports their previous claims stated in a shareholder letter issued earlier this year. The investment firm emphasized that the current Board of REC Silicon, elected at the latest Annual General Meeting, is hampered by a restrictive agreement with Hanwha known as the Transaction Agreement (TA).

The restrictions imposed by the TA limit the Board's ability to pursue advantageous opportunities, and instead, they find themselves under legal pressure from Hanwha which threatens litigation against board members for perceived failures in their duties. Water Street views this as a contradiction, noting that Hanwha is simultaneously a party responsible for placing the company in such a compromising situation.

Adding to their concerns, Water Street highlighted that Hanwha’s actions are indicative of a potential breach of the TA under United States law, especially considering their retraction of financial support after losing influence over the Board.

Despite these challenges, Water Street maintains confidence that, if allowed, REC Silicon’s core businesses—focusing on Polysilicon and Silane gas—can reach their rightful market valuations. The investment group commended the current Board for their efforts to navigate within these difficult constraints.

Looking ahead, the conflict between Water Street and Hanwha raises important questions about corporate governance, investor rights, and the strategies necessary for maximally leveraging an entity’s resources. Investors and market watchers will be keenly looking out for how these dynamics evolve, particularly as the Board seeks pathways to enhance shareholder value amidst the hurdles presented by the TA. Water Street’s firm stance underscores the significance of a board's autonomy in a competitive corporate landscape, reminding us of the critical balance between investment influence and effective company management.

The tension within REC Silicon’s leadership can be seen as a microcosm of larger trends in corporate America, where shareholder activism increasingly shapes decision-making processes. The implications of this case may well extend beyond the immediate parties involved, influencing how similar disputes are navigated in the future, and ultimately affecting the strategic direction of publicly traded entities trying to strike a balance between governance and shareholder interests.