According to an emergency ordinance, CFR will receive a loan of almost 770 million lei (EUR172 million), due on November 30, 2012, taken from the state’s earnings from privatizations. The administrator will use the money to pay the principal as of March 31, 2012 on its debts to private energy suppliers, who will have to agree to forego any overdue payment fees.
EON will receive RON9.7 million, Enel – RON347 million, CEZ – RON167.4 million, Electrica Muntenia Nord – RON11.1 million and Electrica Furnizare – RON234.7 million.
The Government argues that, in the absence of such decisions, the IMF’s board will not approve the latest letter of intent drafted by the Romanian authorities, and CFR will go bankrupt.
The letter also says that, by mid-June, the Ministry of Finance, Ministry of Economy and Ministry of Administration will negotiate a scheme to cancel CFR Marfa’s arrears to Electrica and the local energy producers. For CFR Calatori, the Finance Ministry will look for a way to provide “compensation” worth RON300 million to balance the company’s budget.
The Government also promises the IMF and the European Commission that CFR will implement cost-cutting measures and take steps to raise its income, in order to ensure its financial viability in 2013 and beyond.
In April, the Government approved the conversion of CFR SA’s debts, which stood at RON3.99 billion last year, into shares. A similar operation was authorized at the end of 2006, just before Romania joined the European Union, for 34 state-owned companies, including CFR SA, but the European Commission has still not approved the Government’s ordinance.
In 2008, the Ministry of Transport proposed converting CFR SA’s debts to Electrica into shares, but this plan was rejected by the Ministry of Economy and Finance, which argued that the transport operator is not among the list of companies to be privatized, meaning the shares could not be sold later.
The Government has no plans at the moment for CFR’s privatization, only its restructuring. (EUR1=RON4.4642)