The Bucharest Court approved yesterday the insolvency request of ELCEN, a state-owned power producer that also provides the heat and hot water distributed in Bucharest.

KPMG was appointed the company’s judicial administrator.

According to the company, its total debts have reached EUR 402 million whereas its claims amount to EUR 827 million. The company has a lot of money to recover from the Bucharest municipality’s heat distributor RADET, which also officially went into insolvency earlier this week.

The insolvency would help ELCEN optimize its activity, according to the company. Its creditors will have to accept a reorganization plan.

“Insolvency doesn’t mean bankruptcy,” reads the press release.

When the debtor doesn’t have any more “cash” to pay its debts, it is in insolvency, the company’s press release explained the situation. The ELCEN board of administration decided the producer’s insolvency on September 22.

editor@romania-insider.com