The District Court of Reykjanes has today granted the board of directors of United Silicon ehf. an authorisation for a moratorium, with the goal of reaching agreements with creditors regarding outstanding debts. The request is due to operational difficulties of the company‘s silicon factory in Helguvík, that can be traced to recurrent equipment malfunctions that have caused great damages to the company. Due to these operational difficulties, the company will have difficulties in making debt payments to its creditors, and individual creditors are expected to take actions against the company if it does not react immediately. A recent ruling of an arbitral tribunal in the company‘s dispute with ÍAV has increased the level of uncertainty, as an agreement regarding payment of the debts in dispute has not been settled.
Since the factory began operation, its shareholders have provided additional capital stock to finance the company‘s operations and to make improvements to the equipment, as well as general facilities for operations and employees. It is now clear that even more improvements to the equipment and facilities are necessary for the factory to produce both the quantity and the quality of product as originally intended, and without the smell pollution that local inhabitants have complained about.
The company‘s board of directors are of the opinion that a moratorium should create enough leeway to make the necessary changes to ensure the normal operations of the factory. The market outlook is positive and prices have been increasing. Future prospects are therefore good, given that the necessary additional finances can be secured, creditors can be negotiated with, and the operation can be reconfigured. The authorisation for a moratorium was necessary in order to turn the operations around, and to collaborate with the creditors with the goal of reaching agreements regarding outstanding debts. The board takes the responsibility of operating a large company with a great number of employees and producing income for the near community, very seriously. Reaching agreements on outstanding debts is the best way to protect jobs and to ensure that the development of the factory operations will continue, so that the company can continue to operate in accordance with its official authorisation and in harmony with the environment.
Further information will be provided when the company’s directors have met and consulted with a moratorium assistant, following his advice.