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July 27, 2021

Appeal for annulment used to bring Hidroelectrica back from insolvency

The state company became insolvent again after the Bucharest Court of Appeals accepted the appeals filed by energy traders.

Euro Insol, legal administrator of Hidroelectrica, will use the appeal for annulment filed to bring the company back from insolvency, but only after the Court of Appeals provides the substantiation report, Remus Borza, lawyer and owner of Euro Insol, stated for Mediafax. “They (editor’s note – the creditors) were not subpoenaed to appear before the Court of Appeals at Tuesday’s hearing. The real creditors of Hidroelectrica are 12 banks which have not been subpoenaed. The court said it was not necessary to subpoena them,” Borza explained.
Hidroelectrica became insolvent after the Bucharest Court of Appeals accepted the appeals filed by energy traders Alpiq, Energy Holding, and EFT, as well as Andritz Hydro, Alro, Elsid Titu, and the Second District Local Budget Revenue Directorate. The court also accepted the appeal filed by Alpiq RomIndustries regarding the unilateral termination of the energy purchase agreement.
Gabriel Dumitrascu, appointed special administrator
On Friday, the General Shareholders’ Assembly of Hidroelectrica appointed Gabriel Dumitrascu, head of the Privatization Division within the Energy Department, special administrator of the company, according to a press release issued by the company. One of his tasks will be to propose a restructuring plan for the insolvent company.
“Together with Euro Insol, the company’s legal administrator, we will resume the final stages of coming back from insolvency and prepare the company to successfully resume the stock exchange listing process (editor’s note – scheduled in June). Despite the difficulties experienced by the company at the moment, Hidroelectrica has a solid financial position, important and valuable assets, and very good results at the last audit, all of which ensure the company will remain fully under the ownership of its two shareholders, the Romanian state and Proprietatea Fund,” Dumitrascu stated in the press release.
According to Borza, Hidroelectrica reported a net profit of RON 900 million and a turnover of RON 3 billion last year.
In spring 2012, Euro Insol unilaterally terminated the energy supply agreements concluded with Alpiq RomIndustries and Alpiq RomEnergie, companies that are part of Swiss group Alpiq, as well as with Energy Holding, EFT Romania, and EFT AG (Switzerland).
Back in September 2012, Borza stated the so-called ‘wise guys’ requested RON 870,5 million to be included in the preliminary creditors’ list of Hidroelectrica, then in insolvency, claims which were subsequently denied by the legal administrator. The only energy trader that requested compensation – RON 527.7 million – for the unilateral termination of bilateral agreements was Alpiq Romindustries, Borza said further. The other companies requested compensations for benefits unrealized when Hidroelectrica enforced the force majeure clause due to drought, he continued.
In January 2013, Euro Insol unilaterally terminated the addendum to a EUR 71.5 million contract concluded between Hidroelectrica and Andritz Hydro in Austria for the technological update of Gogosu hydroelectric power plant located on the Danube. Hidroelectrica was in insolvency between June 2012 and June 2013 mainly because energy was being sold at prices below the market price through preferential contracts concluded with ‘wise guys’ from the energy sector. In a report on why the state company became insolvent, Euro Insol showed that bilateral energy sale agreements generated losses of EUR 1.2 billion between 2006 and 2012, due to electricity purchased at low prices by the beneficiaries.

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