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REC Wafer Norway to file bankruptcy after shareholder pulls funding
By Caroline Salls
Pittsburgh, Aug. 17 - REC Wafer Norway AS will file for bankruptcy after 100% shareholder REC ASA decided to cease further funding, according to a news release.
The company said REC's decision leaves no basis for a solvent winding-up of REC Wafer. The production of REC Wafer Norway in Glomfjord and at Heroya was permanently closed down during 2011 and 2012, and wind-up activities were launched.
As of the end of July, REC Wafer Norway said its estimated carrying value of debt exceeded the estimated value of assets by about NOK 1.2 billion, meaning a solvent winding-up of the company would depend on continued funding from REC ASA.
REC Wafer Norway said it has previously been released as a guarantor under the existing bonds and convertible bond agreements of REC ASA, and REC Wafer Norway is not a guarantor under REC's new bank loan agreement, which took effect on Aug. 10.
REC decided to cease the funding based on the overall financial situation of the REC group and the interests of its stakeholders, the release said.
REC said it will incur NOK 400 million in additional costs and further losses related to guarantees, loans and indemnity agreements in connection with REC Wafer's bankruptcy.
According to the release, the vast majority of REC Wafer's former employees have reached the end of their notice period and received their final salary settlements.
The company said the salaries of the remaining employees are secured through a salary guarantee from REC ASA.
The bankruptcy of REC Wafer Norway will have no effect on REC Solar and REC Silicon, according to the release.
Based in Sandvika, Norway, REC is a vertically integrated solar power company.
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