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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] REC Silicon, a materials affiliate of Hanwha Group, is stepping up liquidity measures through loan extensions, equity financing, and continued support from group affiliates amid ongoing financial strain.
On April 13 (local time), REC Silicon announced it had extended a $7 million unsecured short-term loan agreement with Anchor AS through October 13. Anchor AS is a Norway-based special-purpose entity established by Hanwha Corporation and Hanwha Solutions to manage their stake in REC Silicon.
The loan extension reflects the company’s tight cash position. As of the end of last year, REC Silicon held approximately $7.3 million in cash and cash equivalents, while net debt stood at $483.8 million.
Financial pressures have been exacerbated by costs associated with maintenance and restructuring following the suspension of polysilicon production at its Moses Lake plant in the United States at the end of 2024.
Without continued shareholder support or additional funding, the company faces challenges in servicing debt and maintaining operations. Hanwha Group has been providing ongoing financial backing through its affiliates. Last year, REC Silicon borrowed a total of $90 million from Hanwha International, Hanwha Global America, and Anchor AS.
In addition, a $110 million loan previously arranged with KEB Hana Bank was refinanced with a maturity extended to March 2027, backed by a payment guarantee from Hanwha Solutions.
REC Silicon has also pursued equity financing to strengthen liquidity. Earlier this month, it carried out a rights offering worth NOK 972.6 million (approximately KRW 152.5 billion), fully underwritten by Anchor AS. Following the offering, Anchor AS acquired all unsubscribed shares and additional shares issued as underwriting fees, increasing its ownership stake from 60.41% to 93.13%.
This support structure is placing additional financial burden on Hanwha Group entities. Hanwha Solutions recently sought to improve cash flow through a KRW 2.4 trillion rights offering, though the process has been delayed after the Financial Supervisory Service requested revisions to its securities filing. Some minority shareholders have raised concerns over the high proportion of funds allocated to debt repayment.
Meanwhile, Hanwha Corporation has committed to subscribing for more than 120% of its allocated shares in the offering, investing approximately KRW 843.9 billion.
AlphaBIZ Paul Lee(hoondork1977@alphabiz.co.kr)
