- Energy Ministry, main shareholder, to float 15 pc of company’s shares
The Bucharest Court has discharged Hidroelectrica from insolvency on Tuesday. The ruling is not final but it is executory.
Hidroelectrica has been insolvent since February 2014. The company had previously been insolvent from June 2012 to June 2013.
The most important measure taken during the insolvency period was cancelling the 11 bilateral contracts concluded directly with several energy traders and end consumers, the so-called “slick guys”: Energy Holding, Alpiq Romindustries, Alpiq Romenergie, Energy Financing Team, Alro Slatina, ArcelorMittal Galati, Electromagnetica, Electrocarbon, Euro-Pec, Elsid, Luxten.
The long-term bilateral contracts caused Hidroelectrica over EUR 1.1 bln in damages, the trustee in bankruptcy’s report on the causes of the insolvency shows, particularly “because of the contracts’ very long period, surpassing 10 years, and of the vague and general character of the contract terms, which do not allow Hidroelectrica to cancel the contracts in the hypothesis an agreement is not reached on an energy price correlated with the evolution of the price of energy on the competitive market.”
Next, the Energy Ministry, Hidroelectrica’s main shareholder, is planning to list on the stock exchange 15 percent of the company’s shares. Fondul Proprietatea, Hidroelectrica’s only minority shareholder, is estimating its 20 percent stake in the company at EUR 594 M (USD 676 M), which suggests the company is worth EUR 2.97 bln. This could be a state-owned Romanian company’s first initial public offering (IPO) since Electrica was floated in 2014.
Energy Minister Victor Grigorescu: the next stage is the selection of a professional Supervisory Board
“We salute the court’s decision concerning the fact that Hidroelectrica, one of the most important energy companies, is meeting the insolvency discharge conditions. A complex restructuring process was implemented, one that has made today’s Hidroelectrica a pillar of the National Energy System, a profitable company with real aspirations of becoming a regional leader in this sector too. The next stage is the selection of a professional and upright Supervisory Board that would give the company a strategic vision and would support the development and modernisation of its production capacities and the boosting of economic efficiency.”
Remus Borza: Hidroelectrica has become most profitable Romanian company
Hidroelectrica has become the most profitable Romanian company, after costs were cut on all levels during its period of insolvency, Remus Borza, the representative of Euro Insol, Hidroelectrica’s trustee in bankruptcy, stated on Tuesday at a press conference marking the company’s discharge from insolvency.
“Hidroelectrica’s insolvency has showed that state-owned companies can generate trust and profit too, if correctly managed. This transformation, from being the “Cinderella of the Romanian energy sector” to “the Crown Jewel” or the “Queen of the Prom,” has meant a lot of work and responsibility on the part of the management team,” Borza said.
“In 2016, we are handing over this company to the two shareholders – Energy Ministry and Fondul Proprietatea – with indicators that would make jealous any Romanian company. We have ruthlessly cut costs on all levels. We have reached an EBITDA of 68 percent of turnover. In 2014-2015, EBITDA stood at 63 percent of turnover. No other company registered at the Trade Registry has posted such indicators. This means we had an operating profit of EUR 500 M out of a turnover of EUR 800 M,” Borza said.
Euro Isol’s representative added that at this moment the company is debt-free and has paid its RON 4.3 bln debt out of its own sources. Moreover, the company had a turnover of RON 2.4 bln in 2012, RON 3 bln in 2013, RON 3.157 bln in 2014 and RON 3.110 bln in 2015.