Romania’s biggest power producer to exit insolvency ‘latest by May’

Bucharest / Reuters

Romanian state-owned power producer Hidroelectrica expects to finally exit its insolvency process by next month, and aims to sell a minority stake in an initial public offering by November, its manager told Reuters on Sunday.
Romania’s largest and cheapest power producer has been run by a court-appointed manager after it became insolvent for the second time in early 2014.
It first became insolvent in 2012 after losing $1.4 billion over six years from contracts under which it sold the bulk of its output below market prices.
It underwent restructuring, cancelled those contracts and posted record high profits. But contract holders challenged the cancellations and a court ruling pushed the firm back into insolvency, where it has remained a year longer than expected due to lengthy court procedures. “There are four unsolved challenges left out of 75, and the court date for them is April 6,” manager Remus Borza said in a telephone interview.
“Hidroelectrica will exit insolvency on April 6 at the earliest, and in May at the latest. After that, it is a straight line to an initial public offering and I stand by a deadline of November.”
It would be the first IPO of a state-owned firm in Romania since the sale of power utility Electrica in 2014. Borza said Hidroelectrica had already appointed listing and legal advisers. It reiterated that it could list a 15 percent stake, both on the Bucharest and London stock exchanges.
Investment fund Fondul Proprietatea, which is the sole minority shareholder in Hidroelectrica, values its 20 percent stake at 594 million euros ($676 mln). That would imply a value for the whole company of 2.97 billion euros.
Borza also said Hidroelectrica expected a record gross profit of 1.3 billion lei ($331.52 million) at the end of this year, up from 1.1 billion lei last year.