“We are talking about ensuring the contracts’ legality. (…) These contracts, or their extensions, go around the law. (…) Before we unilaterally terminate, we want to provide the opportunity for a bilateral, amicable resolution to the issues with these contracts,” said Remus Vulpescu, the company’s administrator.
The contracts were signed in 2001-2003 and expire in 2014, 2015 and 2018.
Vulpescu said the beneficiaries of the direct contracts with Hidroelectrica buy energy at last year’s prices, since this year they refused to renegotiate the fees except if the company guaranteed a fixed price in lei for the duration of 2012, which was “much lower” than the one on energy exchange OPCOM.
He added that Romanian legislation states, since 2006-2007, that energy must be sold exclusively through OPCOM.
The companies that last year had the largest contracts with Hidroelectrica are Alro (322.47 million lei – EUR72 million), Energy Holding (RON280.25 million), Alpiq RomEnergie (RON204.34 million), ArcelorMittal Galati (RON185.46 million), EFT Romania (RON136.68 million), Alpiq RomIndustries (RON130 million) and Electromagnetica (RON124.95 million).
EFT is wholly-owned by Danish company EFT Holdings. Alro is owned by the Vimetco group, registered in the Netherlands and controlled by Russian businessman Vitaly Mashitsky.
Alpiq RomEnergie and Alpiq RomIndustries are owned by Swiss group Alpiq. The companies are the former Ehol Distribution and Buzmann Industries, set up by Bogdan Buzaianu and taken over by the Alpiq group.
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=RON4.4715)