The selection of board members took place during the term of Constantin Nita as Energy Minister. At that moment, Hidroelectrica was the state’s star in the listing program for 2014. Three months later, the company went insolvent again.
George Cristodorescu, former general manager of E.ON Romania, took over as president of the supervisory board on December 3, 2013, on the basis of Emergency Ordinance 109/2011 on the corporate governance of public enterprises.
The board also included Victor Cionga, former general manager of the Bucharest Stock Exchange, Adrian Rusu, manager at Transelectrica, or Gheorghe Stirbu, manager of pharmaceutical company Egis Romania. Hidroelectrica officials specified none of them is present in the company.
“As it entered insolvency, the company went back to the form it had before making this decision. At that moment, Hidroelectrica did not have a supervisory board,” said George Cristodorescu.
In late March, Remus Bora, the lawyer who controls Euro Insol, Hidroelectrica’s legal administrator, said the company was likely to exit insolvency in 7-12 months.
“It is not compulsory for the company to revert to the same supervisory board after it exits insolvency,”Cristodorescu also said.
The move to dissolve the board comes as, according to Hidroelectrica data, the company spent EUR260,000, VAT not included, through contracts with international recruitment firms to find private managers.
“The way Hidroelectrica re-entered insolvency took us by surprise. The company should have followed a different direction. Listing at the bourse should have followed and the implementation of another management plan. It was a U-turn,” explains George Cristodorescu.
In 2014, Hidroelectrica should reach net profit of 247 million lei (EUR55 million) and revenue of RON2.468 billion (EUR552 million), with estimated energy quantities standing at some 14 TWh.
According to the latest information, Remus Borza said in 2013 the company generated net profit of RON910 million and revenue of RON2.69 billion. The company’s representatives explained the predicted decline would be due to the lower energy price and the introduction of the special construction tax.
Since it went insolvent for the first time, in June 2012, Hidroelectrica has cut its headcount from 5,239 to around 4,100 persons at present. The layoffs will continue, said the company’s representatives, also specifying Hidroelectrica has an “excellent financial footing”.
According to a proposition, Remus Borza asks for a performance bonus of 2% of net profit, but no more than EUR2 million plus VAT for managing Hidroelectrica during its second period of insolvency. The monthly insolvency management fee for Euro Insol, the company controlled by Borza, of EUR50,000 plus VAT, is added to the performance bonus.
In the first insolvency period, Remus Borza and Euro Insol got a performance fee of EUR2.265 million plus VAT.
(English version by Catalina Apostoiu)