Remus Borza, the owner of Hidroelectrica’s court-appointed administrator Euro Insol, said the company paid Monday a EUR2.6 million installment to a bank and prepares to pay EUR12 million to another lender.
Hidroelectrica, which is majority owned by the Economy Ministry, requested the start of insolvency proceedings last week, citing a decrease in sales corroborated with surging debts.
Bankers have criticized Hidroelectrica’s move, saying foreign investors will avoid Romania after such a decision, while they will have to build significant provisions to cover loans granted to the power producer.
Moody’s Investors Service said in a report Monday that Hidrolectrica’s unexpected insolvency is creating negative pressure on sovereign credit ratings because the government might have to cover at least part of the debt owed by the state-run power company. Last week, Moddy’s cut Hidroelectrica’s ratings by four notches, after the insolvency announcement.