REC Silicon Annual Report 2019

95 Notes to the financial statements, REC Silicon ASA REC Silicon Annual Report 2019 N O Impairment of loan to US operations (USD INMILLION) 2019 2018 Par value at January 1 1,001,928 944,628 Accumulated impairment at January 1 -710,754 -318,865 Carrying value at January 1 291,174 625,763 Addition 0 57,300 Impairment -13,726 -391,889 Carrying value at December 31 277,448 291,174 Par value at December 31 1,001,928 1,001,928 Accumulated impairment at December 31 -724,480 -710,754 The impairment loss represents the book value in excess of the fair value of loans to REC Silicon ASA’s US subsidiaries. Estimates of the value of US operations were calculated using the fair values of financial assets and liabilities held by the US entities and the net present value of cash flows of operations in the United States. RESEARCH AND DEVELOPMENT REC Silicon ASA did not conduct any activities associated with research and development during 2019 and 2018. GUARANTEES AND INDEMNIFICATION AGREEMENTS At December 31, 2019 bank guarantees amounted to USD 1,137 thousand (USD 1,112 thousand at December 31, 2018). These guarantees were cosigned by REC Solar. The Company and some of its subsidiaries are jointly and severally liable for certain loans established by the Company. • Relevant loan agreement at December 31, 2019 was as follows: – REC04: USD Senior Secured Callable bond, USD 110million. The tenor is fromApril 13, 2018 to April 13, 2023 • The Company and the following subsidiaries of the Company are jointly and several liable for the above-mentioned loan at December 31, 2019: REC Silicon AS, REC Silicon Inc., REC Advanced Silicon Materials LLC, REC Solar Grade Silicon LLC REC Silicon Pte. Ltd. The Company has provided guarantees and indemnification agreements in connection with the bankruptcy of RECWafer Norway AS in 2012. Themaximumamount of the indemnification agreements is NOK270million (USD30,751 thousand). Liabilities have been estimated based upon conditions contained in these agreements for NOK212.7million (USD24,225 thousand) at December 31, 2019. Indemnification loans estimated to NOK 200million (USD22,778 thousand and an option agreement with estimated fair value of NOK 12.7million (USD1,446 thousand). See note 29 and 30 to the consolidated financial statements for more information.