Daniel Englander

Q-Cells to Dump Its Stake in REC? May 29, 2008 at 10:30 AM

Rumors spread yesterday that Germany’s Q-Cells was planning to sell its 17.9 percent stake in Renewable Energy Corporation. Q-Cells, the world’s largest solar cell manufacturer, declined to comment on the rumor that sent its stock down 3.7 percent to €73.53. Norway-based REC is currently building 1.5 GW manufacturing plant in Singapore that will combine its wafer, cell, and polysilicon fab works. It’s been a tough few weeks for Germany’s publicly traded solar, whose stocks are down across the board over investor concerns that the CDU will succeed in its bid to cut the country’s feed-in tariff by 30 percent within the next year.

The rumor follows on news from the end of April announcing Norwegian industrial Orkla had ended its put option in Q-Cells’s shares of REC. In February, Good Energies sold 12.48 percent of REC to Orkla and what would become Q-Cells’s 17.9 percent stake. At the time of the sale, Orkla struck the put option deal with Q-Cells, which was worth about $13 million. The agreement’s end may have helped spur rumors over Q-Cells’s possible dumping of its own REC stock.

While it’s doubtful Q-Cells would drop its stake in the near term, a move out of REC would give the company some growth capital in the mid- to long-term. Earlier this week Q-Cells announced it would invest $3.5 billion to expand its production operations to Mexico’s new “Silicon Border” region in Mexicali State. The Mexico expansion is part of the company’s plan to move its presence into potential markets. However, the extent to which the market potential in North America is realized is dependent on the passage of PTC and ITC within the year (unlikely) and the eventual creation of a carbon market in the U.S.. Q-Cells is also expanding into Asia, where its building a new production plant right down the road from First Solar and SunPower.

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