Solar — Proxy Solicitation & Information Statement 2014

Dec 23, 2014

REC SOLAR ASA

INFORMATION TO SHAREHOLDERS IN CONNECTION WITH THE PROPOSED SALE TO BLUESTAR ELKEM

CONTENTS

Letter of recommendation from the Chairman of REC Solar ASA	Page 3
Explanation of the Board of Directors' proposals	Page 7
Transaction structure and process going forward	Page 8

LETTER OF RECOMMENDATION FROM THE CHAIRMAN OF REC SOLAR ASA

Dear REC Solar ASA shareholder,

Recommended Sale of the Business of REC Solar to Bluestar Elkem

1. Introduction

On 24 November 2014, the Boards of REC Solar ASA ("REC Solar" or the "Company") and Bluestar Elkem Investment Co. Ltd. (Hong Kong) ("Bluestar Elkem") announced that they had reached agreement on the sale and purchase of the entire business of the Company for NOK 4,340 million in cash, equivalent to NOK 108.50 per REC Solar share (the "Transaction").

I am therefore writing to you on behalf of the REC Solar Directors to explain the background to the Transaction and the reasons why the Board unanimously recommends that you vote in favour of the Transaction.

2. Transaction summary and subsequent Company liquidation

Bluestar Elkem has conditionally agreed to purchase 100% of the shares in a Luxembourg SPV which will own REC Solar Holdings AS and all the assets and liabilities of REC Solar from a subsidiary of REC Solar. The structure of the Transaction was a result of negotiation between the parties to address the fact that Bluestar Elkem's parent company is Chinese, and REC Solar is a Norwegian listed entity.

The Board expects that, following completion of the Transaction and the Company's receipt of the cash purchase price, REC Solar will be liquidated in accordance with Norwegian rules on solvent liquidations. The result of such liquidation will be that the net proceeds (being the purchase price for the business less transaction costs and costs arising in REC Solar's ordinary course of business until the date of the liquidation) will be distributed to the Company's shareholders. Shareholders are therefore expected to receive a cash payment of approximately NOK 107 per share on or around May 2015.

3. Background to the Transaction

Over the last decade, the solar industry as a whole has been through a very positive but at the same time challenging period. On the positive side:

• ‐ The industry has grown 20-30% annually;
• ‐ The cost of solar energy has been reduced to one third of what it was 6-7 years ago; and
• ‐ Solar energy is now cost competitive with fossil-fuel-based electricity in an increasing number of countries.

In spite of this, financial results for the industry have been disappointing for the last 5 years:

• ‐ Investments by Chinese and other firms created excess solar module manufacturing capacity, decreasing selling prices and profitability globally; and as a result
• ‐ Whilst a large part of the industry was located in Europe before 2010, including companies such as Q-Cells, SolarWorld, BP Solar, Siemens, Bosch and REC, today almost all European companies have either been closed, taken huge losses or been through bankruptcies.

To a large extent, leadership of the solar industry has been taken over by Chinese companies who now represent over 70% of current world production. The solar industry is strategically important to China, and Chinese companies have demonstrated an impressive willingness to make long-terms commitments to the sector.

With this in mind, REC Solar has executed well – achieving EBITDA margins of around 10% in recent quarters and securing significant US contracts for 2015, when Company capacity will also be increased. However, some of this has been made possible by current US import and anti-subsidy duties – which will not continue indefinitely. It is therefore necessary to ensure competitiveness against Chinese competitors in other major solar markets.

The growth of the solar industry is likely to continue at a high rate as it takes increasing market share from the traditional fossil-fuel based market and electricity grid operators. This growth will definitely require significant capital. The industry will also remain exposed to considerable risks related to shifts in technology, government policies, market demand and not least competition from threatened utility companies. Access to multiple technology sources and markets (including China) will be required for solar businesses to continue to maintain a competitive customer proposition.

Because of this, and given the significant equity capital required to ensure such competitiveness, which is not currently available to REC Solar, we believe it is likely that many solar module producers will consolidate further into larger, financially robust units over time. This we see clearly in the US where successful, equity-financed companies are continuing to invest both inside and outside the US. In China, companies with strong financing are actively undertaking acquisitions throughout the solar value chain.

For these reasons the Board concluded that REC Solar should become part of a larger industrial company with a long-term commitment to the solar industry and therefore decided to initiate a sales process for the Company.

4. Sales process for the Company

The proposed Transaction is a result of an extensive and broadly marketed process, initiated after the Company's extraordinary general meeting held on 29 November 2013, through which the Company has thoroughly explored opportunities to maximize value for shareholders.

We appointed Nomura International plc ("Nomura") 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. This entailed making contact with over 50

potential acquirers globally, subsequently running a broad competitive auction process and providing information memoranda, management presentations and site visits to a significant number of the potential acquirers. After evaluation of the interest expressed in REC Solar, and negotiations with certain parties, the Bluestar Elkem proposal was selected as representing a compelling proposition for shareholders.

5. Reasons for recommending the Transaction

In reaching its decision to enter into and recommend that shareholders approve the Transaction, the Board has taken into account:

• The backdrop of a highly competitive and technologically challenging solar supply market, as set out above;
• The necessary investments that would have been required to continue to develop the Company independently in order to maintain its competitive customer proposition over the longer-term; and
• The composition of the Company's share register and Oslo listing.

Against this backdrop, the Board believes that the Transaction delivers a compelling opportunity to REC Solar shareholders.

By leveraging the Company's leading global brand, strong distribution channels and reputation for quality, together with Bluestar Elkem's leading polysilicon technology and ChemChina's global scale and strong Chinese presence, the Board believes that the Company will benefit under ChemChina's ownership from a better platform for future growth.

6. Irrevocable Undertakings

REC Solar shareholders comprising 20.2% of the Company's share capital have provided soft irrevocable undertakings to vote in favour of the Transaction. Each of the REC Solar Directors who (or whose close affiliates) hold REC Solar shares have irrevocably undertaken to vote in favour of the Transaction.

7. Bluestar Elkem's strategic plans for REC Solar

Bluestar Elkem is one of the world's leading companies for the environmentally-friendly production of materials. Its principal products are solar grade silicon, silicon, special alloys for the foundry industry, carbon and microsilica. China National Bluestar, which acquired Elkem in 2011, is a chemical engineering company 80%-owned by China National Chemical Corporation ("ChemChina"), and 20%-owned by Blackstone. ChemChina is the largest chemical company in China and one of the largest in the world, with US\$40bn revenue and US\$44bn of assets in 2013. ChemChina has a strategic goal to grow its presence in the solar industry, and to establish a leading integrated PV player.

The Transaction provides a unique opportunity for the ChemChina group to expand into downstream solar and fully utilize Bluestar Elkem's leading polysilicon technology.

The REC Solar Board views the combination of Bluestar Elkem and REC Solar as a positive outcome for the Company, its excellent workforce and other stakeholders, and we believe that the combination will provide a strong platform to further develop REC Solar. Bluestar Elkem and REC Solar have developed a strong business relationship and the combined entity will have a strong basis for new development of the business by leveraging REC Solar's leading global brand, strong distribution channels and reputation for quality.

8. Recommendation

The REC Solar Directors consider that the Transaction provides a compelling opportunity for REC Solar shareholders against the backdrop of a highly competitive solar supply market and the Board's expectations of the investments required to continue to otherwise develop the Company independently.

Accordingly, the Board unanimously recommends that REC Solar shareholders vote in favour of the Transaction at the EGM to be held on 15 January 2015.

Yours faithfully

Ole Enger Chairman, REC Solar ASA

EXPLANATION OF THE BOARD OF DIRECTORS' PROPOSALS

As set out in the notice of the extraordinary general meeting to which this document is attached, the shareholders of REC Solar ASA ("REC Solar") are asked to vote on two matters related to the sale of REC Solar's business to Bluestar Elkem Investment Co. Ltd. (Hong Kong) ("Bluestar Elkem"), namely item 4 "Authorisation to divest the company's business" and item 5 "Amendment to the articles of association related to the purpose of the business". Both items on the agenda require the affirmative vote by the extraordinary general meeting in order for the sale of the business to Bluestar Elkem to be completed.

The board of directors of REC unanimously recommends its shareholders to vote in favour of both proposals.

Under item 4 on the agenda for the extraordinary general meeting, the board of directors of REC Solar asks its shareholders to grant the board of directors an authorization to divest the company's business. The proposed resolution, as included in the notice of the general meeting is as follows:

"The transfer of all assets and liabilities of REC Solar ASA is approved."

This resolution will require a simple majority of the votes cast at the general meeting, and is mutually conditional upon approval of the resolution under item 5 on the agenda.

Under item 5 on the agenda, the board of directors of REC Solar also asks its shareholders to amend the articles of association of the company, so as to allow a sale of the entire business. The reason for this proposal is that REC Solar, following a sale of its business, will no longer conduct business which is in accordance with its current articles, stating that the company's purpose is the "development and sale of products and services related to renewable energy sources, and to perform other financial operations related to such."

Consequently, the board of directors has proposed that the general meeting amends the company's objective as included in the articles, to have the following wording, allowing also for a sale of the business:

"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 the sale of business within such areas of business, and/or to manage funds after such sale."

This resolution will require a 2/3 majority of the votes cast at the general meeting, and is mutually conditional upon approval of the resolution under item 4 on the agenda.

Subject to the transaction being approved and closing taking place, the board of directors of REC Solar will subsequently call for a new general meeting to resolve the dissolution of REC Solar.

TRANSACTION STRUCTURE AND PROCESS GOING FORWARD

The sale of REC Solar ASA's ("REC Solar") business to Bluestar Elkem (the "Transaction") will be structured as a sale of 100% of the shares in a subsidiary which on completion of the Transaction will own REC Solar Holdings AS and all of the assets and liabilities of REC Solar. The selling company will be a subsidiary directly owned by REC Solar.

The purchase price payable by Bluestar Elkem is a cash consideration of NOK 4,340 million, equivalent to price of NOK 108.50 per share in REC Solar ASA, and payable by Bluestar Elkem to REC Solar in its entirety upon closing of the Transaction.

The Transaction is subject to approval by the general meeting of REC Solar with a 2/3 majority, as further described above. 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.

The Transaction is not subject to any financing condition, but is subject to other customary conditions including approval by Chinese and Singaporean regulatory authorities as well as required anti-trust approvals. The Company expects all closing conditions to be fulfilled according to plan and an update of the status for the closing conditions will be given at the extraordinary general meeting on 15 January 2015.

REC Solar has undertaken not to actively solicit offers from third parties which would compete with the Transaction, and has accepted a cost coverage fee of USD 10 million if the Board of the Company changes its recommendation of the Transaction and the Transaction is not completed due to a superior offer.

The Transaction is currently expected to be completed during March 2015.

Following the completion of the Transaction and REC Solar's receipt of the purchase price, the board of directors expects to propose to shareholders that the Company be liquidated under Norwegian rules on solvent liquidations. The result of such liquidation will be that the net proceeds (being the purchase price for the business less transaction costs and costs arising in REC Solar's ordinary course of business until the date of the liquidation) will be distributed to REC Solar's shareholders. Transaction costs will, inter alia, include all transaction related bonuses and fees to advisors, including a fee of NOK 12 million to the Chairman of the Board as payment for his services related to the Transaction. It is not possible to specify the exact distribution amount per share at this stage, but shareholders should expect to receive approx. NOK 107 per share.

Before final liquidation can take place, the Company will need to file tax returns for advanced tax assessment. This is currently expected to take place in late February, with completion of assessment of taxes in late April or early May.

Final liquidation of REC Solar with distribution of net proceeds to shareholders is therefore currently expected to take place on or around May 2015. The liquidation of the Company will also entail a de-listing of the Company from Oslo Børs. An update on the expected timing for distribution of net proceeds, liquidation and de-listing will be given at the extraordinary general meeting.

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.