As a condition of the loan, CE Hunedoara will have to legally split its operations and draw up a restructuring plan that will be presented to the European Commission for authorization.
The state aid has already been approved by the Competition Council on March 20 and authorities also notified the European Commission.
The company, controlled by state through the Department for Energy, was set up in 2012 through the merger between state-owned thermal power producers Deva and Paroseni and produces electricity using coal.
CE Hunedoara has nearly 6,500 employees working in four coal mines and two coal-fired power plants that covered around 7% of the country’s electricity consumption in 2013.
International Monetary Fund has requested an extensive reorganization of energy holdings CE Hunedoara and CE Oltenia.
Last year, government said it expected letters of intent from prospective investors looking to participate in the privatization of energy holding CE Hunedoara. In December 2014, former minister-delegate for Energy Razvan Nicolescu said that U.S. company Quintana Minerals Corporation was interested in the privatization of CE Hunedoara and required information on the state company from Romania’s Department for Energy.
Energy Minister Andrei Gerea said in February the state was working to save energy holdings Oltenia and Hunedoara from bankruptcy, adding that CE Hunedoara is noncompetitive and cannot handle the current market economy requirements. (EUR1=RON4.4105)