“Any attack of the banks against Hidroelectrica is an attack against the Romanian state. The banks won hundreds of million euros from the relationship with Hidroelectrica and I reassure them they will win as much in the future. (…) Every Thursday we meet the banks; they started to be more reasonable as in the beginning they were only threatening with terminating the contracts, which is impossible now, during insolvency,” Borza told a news conference Monday.
In May, Hidroelectrica asked the Bucharest Court for the start of the insolvency proceedings. Several bankers harshly criticized this decision, claiming the banks that credited the company would be forced to set up provisions while foreign investors would look at Romania with skepticism.
Borza added that two weeks ago, Swiss UBS bank decided to unilaterally terminate a loan contract with Hidroelectrica, which was guaranteed by the state. In the end, Hidroelectrica paid from own funds an installment of 4 million Swiss francs.
The banks “were deprived of some guarantees” when Hidroelectrica chose to terminate six of its energy deals, Borza said.
According to him, “the deals were necessary for the banks, gave them a certain comfort. Hidroelectrica’s financial results are not at all attractive for the banks, as last year’s figures (…) The company itself is less attractive for banks.”
Over the past month, Euro Insol has terminated several deals for cheap energy, signed with firms Euro-P.E.C., EFT Romania, EFT AG, Alpiq RomIndustries, Alpiq RomEnergie and Energy Holding. Hidroelectrica also signed bilateral energy sale contracts with Alro, Elsid, Electromagnetica and Electrocarbon.
Hidroelectrica has RON38 million short-term loans from ING, RON80 million loans from Alpha Bank Romania, RON300 million from BRD, RON46 million from Citibank Europe, EUR32 million from RBS Bank, RON13.5 million from Libra Bank and RON120 million from Banca Transilvania.
The company equally has long-term financing contracts with European Bank for Reconstruction and Development, worth USD110 million, with UBS AG, worth CHF30 million, International Bank for Reconstruction and Development, worth EUR66 million, with Citi International, worth EUR75 million, ING Bank Amsterdam, worth EUR60 million, BCR, worth EUR50 million, and Unicredit Bank Austria, worth EUR117.3 million.
Borza said that under normal circumstances, Hidroelectrica may post a EUR50 million profit in 2013, while in 2012, its profit may set over EUR1 million.
Hidroelectrica has been seriously affected by the drought over the past two years, which led to a low electricity production and RON30 million losses in the first semester of 2012.