* Former Holmen CEO Magnus Hall to replace Loseth on Oct. 1
* Hall says cost, efficiency drive must continue
* Vattenfall has been hit by write-downs, weak power prices
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By Niklas Pollard and Bjorn Rundstrom
STOCKHOLM, May 7 (Reuters) - State-owned Swedish power utility Vattenfall
Vattenfall has been slashing costs and selling off non-core assets in the face of lower electricity prices in continental Europe, retreating from a decade of heavy spending including the 8.5 billion euro ($11.84 billion) purchase of Dutch-based utility Nuon, the value of which has since been written down by 4.1 billion euros.
Hall, 54, who spent 29 years at Swedish forest industry group Holmen
Vattenfall, one of the Nordic country's biggest companies, said Hall, an industrial engineer by training, will start in his new role on Oct. 1, joining a group that has said it expects energy prices in Europe to remain weak for years to come.
"The market situation we are currently in with low energy prices is a big challenge for energy producers," Hall said at Vattenfall's headquarters, which was recently moved from an expensive address in central Stockholm to the suburbs.
"Vattenfall has worked hard to boost efficiency and save costs to achieve a profitability that allows continued investment in renewable energy production units," he said.
"I think that will continue. I consider it a big challenge to continue pushing on this and I don't think there is any choice," he added.
The Nuon purchase, made at a time when the outlook for energy prices was rosier, has also become a political headache for Prime Minister Fredrik Reinfeldt's centre-right government whose role in allowing the deal to go ahead has come under scrutiny ahead of general elections in September.
"Looking back at what has happened historically is not my primary interest," Hall said in reference to the Nuon purchase.
"I think it is very important to concentrate the operations on what we can do best with the assets we have and not concentrate on what should have been done in another period with totally different circumstances."
FAMILIAR ISSUES
Hall's years at Holmen, where he was chief executive for a decade before stepping down earlier this year, has left him with ample experience of energy issues with paper and pulp companies among the top energy consumers in the Nordic country.
"His real strength is in restructuring companies that have a big and strong owner. So the issues he will face now will be familiar to him," said Mikael Jafs, who covers Holmen as an analyst at Kepler Chevreux.
Holmen has a strong majority owner in LE Lundbergforetagen
Hall was also chairman of BasEL, an association of forestry, steel, chemical and mining companies which works to promote stable and competitive electricity supplies to Sweden's heavy industries and which counts state-owned miner LKAB and steel firm SSAB
Faced with what it expects to be years of weak electricity prices in Europe, Vattenfall is retrenching to its core business
and has said it is looking at the possibility of bringing in investors to "share risk" in its continental and UK businesses.
Hall will be leading this process while seeking to bring down costs at Scandinavia's biggest utility, which fell into loss in 2013, hit by 30 billion crowns ($4.6 billion) of impairments.
(Additional reporting by Sven Nordenstam, Simon Johnson and Olof Swahnberg; Editing by Alistair Scrutton and Greg Mahlich)
((simon.c.johnson@thomsonreuters.com)(+46 8 700 1045)(Reuters Messaging: simon.c.johnson.reuters.com@reuters.net))
Keywords: VATTENFALL CEO
