Romanian power company CE Hunedoara faces imminent bankruptcy

By bne IntelliNews March 21, 2016

Romanian power and mining company CE Hunedoara, currently under insolvency, faces imminent bankruptcy as it owes huge debt to the state and its power generation units do not hold operating permits from the environment agency, according to a report from the company’s court-appointed manager GMC published by hotnews.ro on March 18.

The only solution is for the government to accept the company’s mines in exchange for its claims and, as the main creditor of the company, to support a recovery plan for the power generation units, according to GMC’s report.

The company’s difficult financial situation is the result of short-sighted actions by all those involved - management, trade unions, employees, business partners, GMC said.

The government can, under EU regulations, provide help to the mines for closure until 2018, the court-appointed manager explained. Separately, the company could capitalise on its profit-making assets and sell one generation unit while investing in the others, GMC suggested.

CE Hunedoara owes some RON1.5bn (€337mn), of which RON1bn is to the budget.

The company delivers 5% of the country’s electricity and employs 6,500 people. While CE Hunedoara's power generation units are more or less profitable, its coal mines are expected to generate the toughest problems during the restructuring. However, former energy minister Gerea hinted last June that there are investors interested in taking over the mines.

The government tried to rescue CE Hunedoara last year but the state-aid came too late and the company was no longer able to buy the greenhouse gas emission certificates needed for the environment functioning permits. Judging from the situation as revealed by the court-appointed manager, the state emergency aid would have only delayed the company’s insolvency.

 

Related Articles

Moldovan businessman Stati threatens to ask bailiffs to sell Kazakh Kashagan stake in legal battle

Moldovan businessman Anatolie Stati’s spokeswoman said on January 9 that Stati will ask bailiffs to sell a $5.2bn stake in the Kashagan oil field owned by Kazakh sovereign ... more

Romania’s Transgaz reportedly renews bid for Greece’s DESFA

Romanian gas transport company Transgaz has teamed up with Spain’s Regasificadora del Noroeste in an attempt to take over its Greek peer DESFA, where the Greek state has put a 66% stake up for ... more

Poland’s PKN Orlen launches offer to delist Czechia’s Unipetrol

Poland’s state-controlled oil and gas company PKN Orlen has launched an offer to take over Czech refiner Unipetrol, the Polish company said on December 13. PKN Orlen said it will go through with ... more

Dismiss