Romanian cable producer Romcab Targu Mures, a company with a turnover of RON 1 billion (EUR 221 million) in 2016, officially entered insolvency as the Mures Court approved the company’s insolvency request on Monday, February 21. The company has over EUR 200 million worth of debts to banks, state, and suppliers.

Cluj-based RTZ & Partners was appointed as company’s judicial administrator, with a provisional fee of RON 3,000 (EUR 663).

Romcab, which is listed on the Bucharest Stock Exchange, has been open of the fastest-growing companies in Romania in the last six years. The company went out of a lengthy judicial reorganization process in early 2010 and after that its business just exploded. It went from a RON 61 million turnover and a RON 0.9 million net profit, in 2010, to sales of RON 837 million and RON 42 million net profit, in 2015.

In 2016, the firm’s revenues increased by 20% in 2016 to RON 1.017 billion (EUR 225 million) whereas its expenses rose by 55% to RON 1.2 billion (EUR 265 million), according to the preliminary results sent to the Bucharest Stock Exchange.

Romcab saw its financial situation worsen in the last quarter of 2016. In the first nine months of 2016, Romcab had a net profit of RON 39 million (EUR 8.6 million), double over the same period in 2015. The company accumulated losses of some RON 217 million (EUR 48 million) in the last three months of 2016 as it ended the year with losses of RON 178 million (EUR 40 million).

The company had total debts of over EUR 925 million (EUR 205 million) at the end of December 2016. The debts to banks totaled over EUR 54 million. State-owned Eximbank, Banca Transilvania and Piraeus Bank were Romcab’s main creditors. Moscow-based International Investment Bank (IIB) also granted Romcab a EUR 15 million 3-year loan in 2015.

The cable producer is controlled by a firm called Sadalbari SRL, registered in Targu Mures, which holds 69% of its shares. Sadalbari’s main shareholder is local businessman Zoltan Prosszer, who’s also Romcab’s CEO and Chairman of the Board. Former Romanian finance minister Sebastian Vladescu was Romcab’s Chairman of the Board until January 2017.

American investment bank Morgan Stanley bought a 22% stake in Romcab in 2007, the boom year of the Bucharest Stock Exchange. However, Morgan Stanley has been selling its shares over the last years and completed its exit at the beginning of January this year.

In December 2016, Romcab announced a bond issue worth EUR 200 million, which it planned to launch on the Irish Stock Exchange.

editor@romania-insider.com