Chitoiu pointed out that 95% of the electricity produced by the company is not traded on the market but supplied through bilateral contracts. Thus, 75% of the electricity is being sold at prices 40% or 50% lower.
Hidroelectrica, Romania’s largest energy producer, went insolvent on June 20. The board said the decision was prompted by Hidroelectrica’s lower turnover and rising debts, following a “managerial disaster” and drought in 2011.
According to the company’s balance sheet, net profit fell 45 times last year, from RON292.3 million to RON6.4 million, as total revenues decreased from RON3.41 billion to RON3.18 billion, while expenses increased from RON3.02 billion to RON3.14 billion.
Hidroelectrica’s administrator, Euro Insol, recently announced that it would attempt to renegotiate the direct sale contracts amicably, but that they would be terminated if the beneficiaries refuse the new conditions.
Last year, the power producer axed its contracts with Salro, CNH and CLMB Patinoar Brasov, and was dropped by Luxten. Last week, Hidroelectrica terminated its agreement with Euro-P.E.C. Galati, over debts of RON37.8 million and a contract that caused the producer losses of RON118.5 million. (EUR1=RON4.4796)