(Updates with details on funding arrangements, additional contract agreement)
OSLO (AFX) - Orkla ASA said it has paid almost 6.5 bln nkr to hike its stake in Renewable Energy Corporation ASA to 39.99 pct from 27.5 pct, but that it has 'no intention' of raising its stake beyond this level, effectively ruling out a takeover attempt.
Orkla, the Norwegian conglomerate, said it has acquired the latest 12.48 pct in REC from Good Energies Investment (GEI).
As a financial downside protection, Orkla said it has granted Germany's Q-Cells AG a series of put options, at varying prices and across a series of dates.
In addition to the sale to Orkla, GEI said it has sold a further 17.9 pct of REC shares to Q-Cells.
Orkla said it has the right of first refusal to these shares if Q-Cells decides to sell down its holding.
GEI will in due course sell its remaining 19.6 mln shares in REC, equivalent to approximately 4 pct of REC issued share capital, and Orkla said it has an economic interest in the outcome of the sale depending on the obtained sale price.
However the Norwegian firm also said it has no plans to make a takeover attempt for REC.
'Orkla has no intention of increasing its holding in REC beyond the 39.99 pct,' the firm's executive vice-president of Speciality Materials, Ole Enger, said.
'Orkla is supportive of REC's strategy. To realise its growth potential, we believe it is important for REC to have access to the capital market and continue as a publicly quoted company.'
Orkla said it will pay for the shares in cash, funded through a combination of available funds and credit facilities.
In addition to the share purchase, Orkla also announced that its speciality materials division, Elkem Solar, has entered into a long-term supply contract with Q-Cells to supply solar grade silicon.
The agreement is at market terms, the firm said, and the volumes under the contracts relate to the remaining capacity at Orkla's 5,000 ton solar grade plant which is currently being built in Kristiansand, Norway.
Once the plant is open, Elkem Solar will sell 2,400 tons annually to Q-Cells, in a deal running from 2012-18.
In addition, Q-Cells will have the option to buy an additional 1,600 tons in 2010, and 5,000 tons annually from 2011 to 2018, depending on Elkem Solar ability to further expand its production capacity. alastair.reed@thomson.com ar/jfr COPYRIGHT Copyright AFX News Limited 2006. All rights reserved. The copying, republication or redistribution of AFX News Content, including by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited