Hidroelectrica risked running insolvent for good, and be liquidated within six months, if it would not have entered reorganisation in view of an efficiency increase. The decision of declaring the insolvency was aimed at reorganising the company and increasing its efficiency, the minister of Economy, Daniel Chitoiu said in a meeting with the business community. According to the government official, 95 pc of the electricity produced by the company is not traded on the competition-driven market and, instead, is delivered under bilateral contracts (75 pc of it), at prices that are 40-50 pc smaller than normal, and also on the regulated market. Hidroelectrica ran insolvent on June 20, at the demand of its Board of Administrators. The Board justified the request by the turnover decline and the increase of debts, against the background of a “management disaster” and of the 2011 draught. Chitoiu also announced that three state-run companies will receive a new, professional management, by July 25. He admitted that the private management could not be implemented in Hidroelectrica, Oltchim and Electrica Furnizare until the end of June, as provided in the accord with the IMF. However, until July 25, all the phases necessary in the case of the companies will be completed. Hidroelectrica and Oltchim will have only their Boards privatised, given their situations are special, while Electrica Furnizare will receive a private Board and CEO.
