Sandvika, September 22, 2010; REC has today decided to initiate a process with the trade unions with the intention to discontinue the operation at the 150 MW module plant in Glava, Sweden. The plant will continue the production of modules at somewhat reduced capacity utilization until the end of 2010.
"I would like to recognize the considerable efforts of the REC ScanModule team over the last quarters to improve its cost position. Unfortunately the financial performance of the plant has remained unsatisfactory, and despite the efforts of the Glava team the prospects for long-term competiveness of the plant are weak", says John Andersen, Jr., Executive Vice President & Group COO.
A closure of the REC plant in Glava is expected to affect approximately 300 employees. REC will take measures to support these employees in seeking new job opportunities.
The operations of REC's 180 MW solar cell plant in Narvik, Norway, will not be affected. The solar cells produced in Narvik will be used in the manufacturing of REC Peak Energy Modules, partly in REC's Singapore facility and partly through contract manufacturing arrangements. Consequently, REC expects to maintain its current capabilities for supply of modules and at the same time improve its overall cost position.
As earlier communicated, REC will provide an update on the Singapore operations and further information on RECs expected cost position at the investor event to be hosted in early November.
All product warranties provided by REC ScanModule AB will remain intact.
All property, plant, and equipment in REC ScanModule were written down to zero in REC's financial statement for 2009. REC expects to recognize a provision for restructuring cost, currently estimated to approximately SEK 104 million in the third quarter 2010, including termination of employment agreements and other contracts. Furthermore, based on current estimates for operations, the EBITDA for REC's Glava plant is expected to be close to zero in the fourth quarter 2010.
For more information please contact;
Bjørn Brenna, EVP & CFO, +47 900 43 186
Mikkel Tørud, VP & IRO, +47 976 99 144
For press & media:
Kristin Nordal, Corporate Communications Manager, +47 900 15 550
REC is a leading vertically integrated player in the solar energy industry. REC is among the world's largest producers of polysilicon and wafers for solar applications, and a rapidly growing manufacturer of solar cells and modules. REC is also engaged in project development activities in selected PV segments. Founded in Norway, REC is an international solar company, employing close to 4,000 people worldwide. REC had revenues in excess of NOK 9 billion in 2009. Please visit www.recgroup.com to learn more about REC.
This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)