UPDATE 2-Norske Skog CEO resigns, to head Statkraft

* Rynning-Tonnesen to become CEO of Statkraft June 1, 2010

* Says key challenges remain, new job 'unique opportunity'

* Norske Skog shares fall 2 pct

* Statkraft to implement measures to adapt to weaker market

(Adds share price, Statkraft Q3 results)

By Richard Solem

OSLO, Nov 12 (Reuters) - Norwegian paper producer Norske Skog (NSG.OL) said on Thursday Chief Executive Christian Rynning-Tonnesen would leave the company to head state-owned power company Statkraft [STATK.UL] from June, 2010.

"He has made an outstanding effort as CEO in what has been a very demanding period for the group," Chairman Eivind Reiten said, adding the board would begin the process of recruiting his successor shortly.

The global financial crisis has compounded years of difficulties at Norske Skog and the rest of the paper industry, which is struggling with weak demand and overproduction.

The debt-laden newsprint and magazine paper maker has gone through repeated restructuring of its activities and its loans to stay afloat.

Shares in Norske Skog (NSG.OL) fell 2.0 at 0828 GMT against a 0.2 percent rise on the Oslo main index .OSEBX.

"Key challenges remain, and it will be difficult to leave the company," Rynning-Tonnesen said.

"I have nevertheless accepted what for me is a unique opportunity to lead Statkraft, a company I was part of for 13 years before joining Norske Skog."

STATKRAFT

Rynning-Tonnesen will follow Bard Mikkelsen, who will step down as head of Statkraft in accordance with his contract, Statkraft said in a statement.

"I know the energy industry both as a participant and from the sideline, and I regard this position as an exceptionally interesting challenge," Rynning-Tonnesen said in a statement from state-owned utility Statkraft.

Statkraft, the Nordic region's second biggest power producer after Sweden's Vattenfall AB [VATN.UL], posted on Thursday a 61 percent drop in underlying operating profit in the third quarter.

Third-quarter operating profit adjusted for unrealised changes in value and non-recurring items fell to 814 million Norwegian crowns ($145.6 million), with lower electricity prices, Statkraft said.

Power generation rose 14 percent to 11.9 terawatt hours in the third quarter from the same period last year.

"Weaker market outlook, combined with the fact that the capital situation remains unresolved, will result in the implementation of measures to safeguard the group's financial strength," it said.

In February, Statkraft's board submitted a recommendation to the Norwegian Trade Ministry, calling for a strengthening of the company's equity by 8 billion crowns and an adjustment of the dividend policy.

"We are currently considering extraordinary efficiency measures to increase short-term profitability. We will also be revising the investment plans -- depending on the final outcome for the application for stronger equity and an amended dividend policy," it said.

Statkraft has outlined ambitious plans for renewable energy investments. [ID:nL3568243]

"The world needs more renewable energy, and at the same time the existing industry structures must be developed and adapted to new framework conditions," Rynning-Tonnesen said

Rynning-Tonnesen previously held senior positions in Statkraft's top management for 11 years, Statkraft said. ($1=5.589 Norwegian crowns) (Editing by Will Waterman and Mike Nesbit)