REC ASA has decided to cease further funding of REC Wafer Norway AS. Consequently there is no basis for a solvent winding-up of the company and the Board of REC Wafer Norway AS has resolved to file for bankruptcy.
During 2011 and 2012 the production of REC Wafer Norway AS in Glomfjord and at Herøya was permanently closed down. Activities were initiated to wind-up the company.
As of end of July 2012, REC Wafer Norway AS's estimated carrying value of liabilities exceeded the estimated value of assets by about NOK 1.2 billion. Thus a solvent winding-up of the company would be dependent on continued funding from REC ASA, owner of 100 percent of the shares in REC Wafer Norway AS.
REC Wafer Norway AS has previously been released as a guarantor under the existing bonds and convertible bond agreements of REC ASA. REC Wafer Norway AS is not a guarantor under the new bank loan agreement of REC ASA which came into effect on August 10, 2012.
Taking into consideration the overall financial situation of the REC Group and the interests of its stakeholders, the Board of REC ASA has resolved to cease further funding of REC Wafer Norway AS. Consequently there is no basis for a solvent winding-up of the company and the Board of REC Wafer Norway AS has resolved to file for bankruptcy.
In connection with the bankruptcy in REC Wafer Norway AS, REC ASA will incur additional costs and further losses related to certain guarantees, loans, and indemnity agreements currently estimated at approximately NOK 0.4 billion. The amount is subject to changes and it is partly dependent on the dividend in the bankruptcy of REC Wafer Norway AS which again is dependent on the ultimate, realizable values of assets and liabilities in the company as well as other aspects of the bankruptcy proceedings. Except for the said amounts, REC ASA currently has not identified further funding obligations related to the bankruptcy in REC Wafer Norway AS.
The vast majority of the former employees of REC Wafer Norway AS have reached the end of their notice period and thus received their final salary settlements. The salaries of the remaining employees are secured through a salary guarantee from REC ASA which is included in the estimated funding obligation presented above.
REC sincerely regrets the negative impact the bankruptcy of REC Wafer Norway AS will have on our business partners and the local communities affected.
The bankruptcy of REC Wafer Norway AS will have no effect on REC Solar and REC Silicon.