According to the press release, signed by Board chairman Remus Vulpescu, Hidroelectrica will respect all its contracts.
Due to the prolonged drought at the end of 2011 and the beginning of 2012, which reduced Hidroelectrica’s 2011 turnover by 10%, and because of losses caused by the depreciation of the national currency, the reduction of cash flow by over 27% in 2012, the increase of debts due in more than 90 days to 470 million lei (EUR105.2 million) and the losses registered last year and in the first five months of 2012, Hidroelctrica decided in a board meeting on June 15, 2012 to request the start of insolvency proceedings, the release reads.
Hidroelectrica said it aims to reorganize its activity, stop insolvency proceedings and continue its activity without the supervision of legal authorities.
Earlier Monday, Vulpescu said he knew nothing about the insolvency request.
In another news release, the Economy Ministry said the decision was made by the Hidroelectrica’s Board and the ministry does not interfere in the legal proceedings of state-owned companies.
According to Hidroelectrica’s balance sheet, the company’s net profit fell last year 45 times, from 292.3 million lei (EUR65.4 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.
In 2011, Hidroelectrica sold energy worth RON1.52 billion (EUR360 million) through direct contracts, a figure which made up half its sales last year.
The company reported operating profit of RON161.15 million, compared with RON502 million in 2010, and financial losses of RON121.54 million, from RON112 million two years ago.
Short-term debts increased by RON900 million in 2011, from RON1.7 billion to RON2.6 billion, including RON400 million owed to banks (for a total of RON1.1 billion) and RON250 million to suppliers (RON1.12 billion in total).
Long-term debts also increased by more than RON200 million, to RON1.5 billion, with RON1.42 billion in debts to banks. (EUR1=RON4.464)