REC to Shut Swedish Solar Module Plant

Renewable Energy Corp. ASA, the Norwegian maker of solar energy components, will close its 150- megawatt module plant in Glava, Sweden, to reduce costs.

REC ScanModule AB will continue production at a “somewhat” reduced capacity until the end of the year, the Sandvika-based company said today in a statement. The plant, located in the western province of Vaermland, has 300 employees who will be helped to find new jobs, REC said.

“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,” John Andersen, executive vice president and chief operating officer, said in the statement.

All product warranties provided will remain intact, REC said. The company expects to book a provision cost for restructuring of 104 million kronor ($15 million) in the third quarter, including termination of employment agreements and other contracts. The plant’s earnings before interest, taxes, depreciation and amortization are seen to be close to zero in the fourth quarter, REC said.

REC’s shares were little changed at 19.11 kroner as of 9:46 a.m. in Oslo. The stock has dropped 49 percent this year, adding to last year’s 20 percent decline.

Property, plant, and equipment of the Swedish unit were written down to zero in REC’s financial statement last year.

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