The prospects of continued operating losses at Glomfjord pushed the company to this decision. This is despite the fact that three out of four employee representatives in the REC Board of Directors were against the closedown decision. 200 employees will be affected by the move.
"Our organization in Glomfjord has demonstrated operational improvements and cost reductions that are impressive, but this has unfortunately not been sufficient to ensure profitability in a very challenging market environment. We are conscious of the impact the shutdown will have on the affected employees and the community of Glomfjord, and this is therefore not a decision we have taken with ease", said Ole Enger, President & CEO.
The fixed assets of the wafer plant were written down to zero last year. REC will recognize costs and obligations in relation to the close down of the plant in the first quarter 2012. Costs related to close down of production capacity in Norway will be excluded from EBITDA in the covenant calculation in REC’s bank loan agreement. REC will also scale down the credit line to NOK 4.0 billion (0.53 billion) in line with the company needs.