Q-Cells stock spikes with €530M sale of REC shares

Thalheim, Germany's Q-Cells (XETRA: QCE.DE) said today it sold all of its 85 million shares of Sandvika, Norway-based wafer manufacturer Renewable Energy Corp. (OSLO: REC) in a €530 million ($705 million) deal.

Shares of Q-Cells ended the trading day up nearly 9 percent, while REC's shares dropped more than 10 percent after a temporary ban on trading.

Q-Cells said a portion of the share placement would be used to reduce a €360 million ($479 million) existing credit facility. The early debt repayment is expected to reduce interest expenses by €20 million this year.

The 85 million shares represent a 17.2 percent stake in REC.

Q-Cells said it plans to continue to buy solar wafers from REC. The two companies, along with Evergreen Solar, each hold a 33 percent stake in Sovello, a maker of silicon wafers, solar cells and solar modules formerly called EverQ (see EverQ postpones IPO, changes name).

The deal is expected to give Q-Cells more room to negotiate supply deals with REC as the solar industry struggles because of oversupply (see Extra solar panels in Spain driving down prices).

Just last week, Q-Cells said its subsidiary Sontor planned to merge with Grossroehrsdorf, Germany's Sunfilm to create one of the world's largest producers of thin film silicon solar modules, called Sunfilm AG (see Thin film crowd prompts merger of Sunfilm with Q-Cells subsidiary).

Q-Cells said Morgan Stanley, UniCredit, Dresdner Kleinwort/Commerzbank and ABG Sundal Collier acted as bookrunners for today's deal.