Romania’s Hidroelectrica repaid some EUR 630 million of its debt in two years insolvency process
Romania’s largest electricity producer Hidroelectrica reduced its debt by two thirds, or EUR 630 million, since first entering insolvency, in June 2012. The company currently has EUR 350 million in debt, compared to about EUR 980 million on June 20, 2012, according to an official announcement made on Wednesday (June 4, 2014).
The company also registered a positive cash flow of EUR 15 million, as of May 31, 2014, for the first time since starting the reorganization process.
This is due to a significant growth in revenues, form EUR 547 million in 2012 to EUR 712 million in 2013, which allowed the company to repay its creditors and close its credit lines with local and international banks. This includes a EUR 110 million investment loan from the European Bank for Reconstruction and Development (EBRD), which the company repaid in April this year.
The company also anticipates that by the end of the year it will also repay a EUR 75 million loan from Citibank International, a EUR 29 million credit line from RBS Bank Romania and a EUR 60 million investment loan from ING Bank in Dublin. This would further reduce its bank loans from the current EUR 234 million level to some EUR 70 million.
Hidroelectrica’s legal administrator, Remus Borza, recently said that the company could get out of insolvency by June 2015 as there are legal cases against the company yet to be settled in court.
The company re-entered insolvency at the beginning of this year, due to a court decision in favor of the energy traders on an appeal they had made against the decision from June 2013 through which the reorganization procedure of Hidroelectrica was closed.
Hidroelectrica’s first insolvency process, which started in June 2012 and ended in June 2013, allowed the company to cancel the bilateral contracts it had with energy traders, on which the company was losing money due to low prices. This helped the company make a EUR 160 million net profit, in 2013, compared to a EUR 115 million loss back in 2012.
Andrei Chirileasa, andrei@romania-insider.com
