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Renewable Energy Corporation ASA Sandvika, July 18, 2008: To support the increasing demand for silane gas from the electronic and solar industries, REC has entered into a number of significant long-term agreements for the supply of monosilane gas to major gas distributors. Under the agreements, REC will through 2014 deliver gas worth close to USD 1 billion (~NOK 5 billion).
REC Silicon, the world's largest producer and seller of monosilane gas, has signed a number of new long-term agreements with existing customers (major gas distributors) for the supply of monosilane gas (SiH4).
The agreements, most of which run through 2014, are structured as take-or-pay contracts with pre-determined prices and volumes for the entire contract period. The contracts have an approximate value of USD 1 billion (~NOK 5 billion). Additional volumes are contemplated under the agreements and may be accessed by the customers within the contracts framework.
After these agreements have been entered into, substantially all the silane capacity that REC intends to allocate to the merchant market is contracted through 2009. Additional volumes could be allocated from 2010 dependant on the development of end-user markets. For the period 2010-2014, these agreements constitute around 35-50% contract coverage compared to anticipated potential volume allocation - REC will seek to increase this percentage by further implementation of the long term take-or-pay contract strategy. In addition to the silane contract coverage, more than 90% of REC's polysilicon revenues through 2013 are already under contract through REC's own value chain and with external customers.
"By contracting for these volumes, REC gains further visibility on future revenues and earnings and will continue to safely supply monosilane gas to the rapidly growing solar and semiconductor markets", says Erik Thorsen, President & CEO.
Deliveries have already begun and the average sales price under the new contracts is around 15% higher than the current average monosilane gas sale price. The contracts further outline smaller annual price adjustments based on actual cost developments as well as include the security of bank guarantees covering a significant part of the contract volumes.
"REC has 25 years experience in safe manufacture, trans-filling, and distribution of this ubiquitous molecule that provides the vital silicon material present in thin film solar panels, crystalline solar cells, computers, displays, etc. and REC targets to maintain a leading position in this market", says Goran Bye EVP of REC Silicon.
About REC REC is uniquely positioned as one of the most integrated companies in the solar energy industry. REC Silicon and REC Wafer are the world's largest producers of polysilicon and wafers for solar applications. REC Solar produces solar cells and solar modules and engage in project development activities in selected segments of the PV market. REC Group had revenues in 2007 of NOK 6,642 million and an operating profit of NOK 2,588 million. Please also see www.recgroup.com
For further information please contact: Erik Thorsen, President & CEO; +47 907 56 685 Jon André Løkke, SVP & Investor Relations Officer; +47 907 44 949
