Solar — AGM Information 2015

Jan 15, 2015

EXTRAORDINARY GENERAL MEETING OF REC SOLAR ASA

OSLO, JAN 15, 2015

Disclaimer

This Presentation includes and is based, inter alia, on forward-looking information and statements that are subject to risks and uncertainties that could cause actual results to differ. These statements and this Presentation are based on current expectations, estimates and projections about global economic conditions, the economic conditions of the regions and industries that are major markets for REC Solar ASA and REC Solar ASA's (including subsidiaries and affiliates) lines of business. These expectations, estimates and projections are generally identifiable by statements containing words such as "expects, "believes", "estimates" or similar expressions. Important factors that could cause actual results to differ materially from those expectations include, among others, economic and market conditions in the geographic areas and industries that are or will be major markets for REC Solar ASA's businesses, energy prices, market acceptance of new products and services, changes in governmental regulations, interest rates, fluctuations in currency exchange rates and such other factors as may be discussed from time to time in the Presentation. Although REC Solar ASA believes that its expectations and the Presentation are based upon reasonable assumptions, it can give no assurance that those expectations will be achieved or that the actual results will be as set out in the Presentation. REC Solar ASA is making no representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the Presentation, and neither REC Solar ASA nor any of its directors, officers or employees will have any liability to you or any other persons resulting from your use. The following slides should be read and considered in connection with the information given orally during the presentation. The REC Solar ASA shares have not been registered under the U.S. Securities Act of 1933, as amended (the "Act"), and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Act.

• 1. Opening of the meeting by the Chairman of the Board
• 1. Election of Chairman of the meeting and at least one person to co-sign the minutes with the Chairman
• 1. Approval of the notice of the meeting and the agenda
• 1. Authorization to divest the Company's business
• 1. Amendment of the Company's purpose as included in the articles of association
• 1. Amendment of the Company's business address as included in the articles of association

Opening of the meeting by the Chairman of the Board

• Election of Chairman of the meeting and at least one person to co-sign the minutes with the Chairman
• The Board's proposal for resolution
• "Thomas Aanmoen is elected to chair the meeting. Kim Boman is elected to co-sign the minutes"

Approval of the notice of the meeting and the agenda

• The Board's proposal for resolution:
• "The notice of and agenda for the meeting are approved"

TRANSACTION UPDATE AND BACKGROUND

Agenda

Transaction Overview and Sale Process

Indicative Timetable

Background to and Rationale for the Transaction

Acquirer	Bluestar Elkem Investment Co. Ltd. ("Bluestar Elkem"), a Hong Kong based company
Transaction Structure	Bluestar Elkem will purchase the entire business of REC Solar ASA. The business will be acquired through a Luxembourg company which will comprise all of the assets and liabilities of REC Solar ASA
Transaction Consideration	- NOK 4,340 million in cash, equivalent to NOK 108.50 per share - Shareholders expected to receive approx. NOK 107 per share, after transaction costs, via a solvent liquidation post closing Implied Enterprise Value of NOK 3,843 million(1) -
Premiums	Premium(2) on Friday 21st of 15.9%, 22.6%, 27.1% and 19.2% to the close November and 1-, 3-, 6-month volume weighted average share price respectively
The Board of Directors' Recommendation	The Board of Directors unanimously recommends REC Solar shareholders to vote in favour of the proposed transaction at the EGM

1. Based on NOK 108.50 per share equivalent and Q3 2014 net cash position of US\$ 73.2 million converted at NOK/US\$ 6.79 as of 21 November 2014.

2. Based on closing share price as of 21 November 2014 (NOK 93.6 per share).

Irrevocable Undertakings	REC Solar shareholders, including primary insiders, comprising 20.2% of the outstanding shares have provided soft irrevocable undertakings to vote in favour of the transaction at the EGM
Financing	No financing conditions
Alternative proposals	- Non-solicit for alternative proposals - Right to change board recommendation and accept superior alternative proposal prior to EGM - Agreed break fee of USD 10 million if Board changes recommendation - No alternative proposals have been received
Tax implications for shareholders	- Under Norwegian tax laws, shareholders' receipt of funds following the liquidation of a public limited company shall be treated as realization of shares for tax purposes, i.e. in the same way as an ordinary sale of shares - For Norwegian corporate shareholders, liquidation proceeds shall be covered by the tax exemption method. Gain realized by individual Norwegian shareholders will be taxable at a rate of 27%, based on the consideration received less the shareholder's tax base on the shares - For non-Norwegian shareholders, whether corporate or individual, no withholding tax will be triggered on distribution of liquidation proceeds. Non-Norwegian shareholders should consult their own advisors for guidance on the tax treatment of liquidation proceeds in their tax jurisdiction

EGM approval	- For resolution today
Approval of Chinese/Singaporean regulatory authorities	- In process and currently expected to all be obtained in February
Other anti-trust approvals	- Clearance in Germany expected to be obtained by early February
Audited financials	- Group audited financials for FY2014 expected to be provided by end of February, and expected to be the last closing condition fulfilled

• Nomura International plc was appointed as financial adviser to REC Solar in January 2014 with a mandate to identify and approach potential purchasers
• Nomura conducted an extensive test of potential acquisition interest in the Company from strategic acquirers and financial investors, including making contact with over 50 potential acquirers globally
• A subsequent broad competitive auction process was run, including the provision of Information Memorandum, Management Presentations and site visits for a significant number of parties
• After evaluation of the interest expressed in REC Solar, and negotiations with certain parties, the Bluestar Elkem proposal was selected as representing superior value to Company shareholders

Agenda

Transaction Overview and Sale Process

Indicative Timetable

Background to and Rationale for the Transaction

15 January 2015	EGM approval
Late February	All closing conditions fulfilled
Late February	File tax returns for advanced tax assessment in preparation of liquidation
Early March	Closing of the sale to Bluestar Elkem
March	EGM for resolution to initiate a dissolution of REC Solar. EGM notice expected to be distributed in February. Creditor notice period and preparation of audited liquidation balance sheet initiated after EGM
Late April	Completion of advanced tax assessment
May	Distribution of funds to shareholders
Late May	Approval by an EGM of REC Solar of the final liquidation balance sheet, and approval of the final liquidation of the Company, also resulting in de-listing from the OSE

Agenda

Transaction Overview and Sale Process

Indicative Timetable

Background to and Rationale for the Transaction

Since 2008, demand has increased annually* by ~37% while solar system costs have decreased in total by ~70%

Solar system costs in Germany

Euro/Watt – residential systems (3-10 kWp)

* Compounded annual growth rate

Note: PV system price FY 2014 based on USD/EUR 0,7511 Source: BSW Solar photovoltaic index Q2 2014; IHS Research Q4 2014PV Integrated Market Tracker, Dec. 2014

..and solar is now cost competitive with fossil-fuelbased electricity in an increasing number of countries

Definition of competitiveness:

• In the residential and commercial rooftop market segment, solar has to be competitive with electricity retail prices
• In the ground mounted market segment, solar has to be competitive with wholesale prices and pay transmission costs

Source: Bloomberg New Energy Finance 2014; REC

However, due to excessive investments, the industry's financial results have been weak

Industry utilisation and peer group net income margin development (%)

* Industry utilisation for module manufacturing

** Peer group includes Canadian Solar, Hanwha, JA Solar, Jinko Solar, Renesola, Trina Solar, Yingli Solar, First Solar, Sunpower.

Source: IHS Research Q4 2014PV Integrated Market Tracker, Dec 2014, Factset

China is dominating the industry

But trade frictions could see other production locations benefitting

Solar module production – share by geography Fragmented industry

Annual c-si production (GW) Annual c-si module production market share, Q1-Q4 2014 (%)

Source: IHS Research Q4 2014PV Integrated Market Tracker, Dec. 2014

Significant capital is required for REC Solar to remain a top tier player in the solar industry

• Several solar panel makers have expanded their downstream business to mitigate the drop in panel prices
• Trina announced in Jan. 2014 plans to increase its investment in solar power plant projects over the next three years. Trina Solar has 8.0 GW of projects in the pipeline
• Canadian Solar has 4.5GW of projects in the pipeline. Q3 2014 was the first quarter when the downstream solar energy solutions business contributed more than 50% of Canadian Solar's revenue
• Competitors with greater downstream business are growing at a faster pace than REC Solar

Chinese competitors are expanding US competitors are mainly equity financed

* Canadian Solar's module capacity as of 12 November 2014.

Source: IHS Research Q4 2014PV Integrated Market Tracker, Dec 2014, Trina Solar and Canadian Solar company information.

1. Debt linked to the company's downstream business (i.e. construction and/or ownership of operating solar parks). The non-recourse structure means that the risk is ring-fenced to the solar park in question and that the creditors typically only have security in the solar park itself.

REC Solar has regained profitability in the past year, but has gradually lost market share since year 2011

Global module market share. Measured as REC module production / global module installations

REC Solar has outperformed its peers the last 12 months

* Peer group includes Canadian Solar, Hanwha, JA Solar, Jinko Solar, Renesola, Trina Solar, Yingli Solar, First Solar, Sunpower. Source: Factset as of 13 January 2015. Note: Peers are equally weighted.

• Over the last decade, the solar industry as a whole has been through a positive period with considerable growth and cost reductions
• In spite of this, financial results have been very disappointing. The industry leadership have been taken over by China
• Over the last quarters, REC Solar has executed well due to good operational performance and certain price advantages related to dumping duties on Chinese exports

The continued growth of the solar industry will require significant capital

• The industry will remain exposed to risks related to shift in technology, government policies and competition from threatened fossil fuel based competitors
• A further consolidation of the fragmented industry is expected

For these reasons, the Board of Directors have concluded that REC Solar should become part of a larger industrial company with a long term commitment to the solar industry. The Board unanimously recommends REC Solar shareholders to vote in favour of the proposed transaction

Authorization to divest the Company's business

• The Board proposes as follows:
• "The transfer of all assets and liabilities of REC Solar ASA is approved."
• The resolution is conditional upon the general meeting's approval of the proposal under agenda item 5.

Amendment for the Company's purpose as included in the article of association

• The Board proposes that item 3 of the articles of association be amended as follows:
• "The Company's purpose is development and sale of products and services related to renewable energy sources, to perform other financial operations related to such business, to carry out sale of business within such areas of business, and/or to manage funds after such sale."

• The resolution is conditional upon the general meeting's approval of the proposal under agenda item 4.

• Amendment of the Company's business address as included in the article of association

• The Board proposes that item 2 of the articles of association be amended as follows:
• "The Company's business address is in the municipality of Oslo, Norway"