Romania

Romania’s low-cost airline, Blue Air, has been given a new lease of life after Bucharest’s municipal court approved its request to enter a form of bankruptcy protection, SimpleFlying.com reported. The procedure allows the carrier to continue operations and generate revenue for the next 18 months without having to pay back creditors or refund passengers. The agreement between the airline and its creditors will see the airline repay loans in full at a later date. Like many European Airlines, Blue Air has struggled massively to cope with the financial impact of COVID-19.

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Tarom (RO, Bucharest Otopeni) is to receive two batches of funding from the Romanian state coffers in order to stabilise the ailing carrier and then to allow it to restructure going forward, ch-aviation reported. The country's Transport Minister Lucian Bode announced on B1 TV, the Romanian television network, which was then subsequently reported on news.ro, that he will discuss the possibility of handing over EUR157 million euro (USD 175 million) to Tarom with the European Commission in Brussels.

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The Romanian government has released new plans to change legislation in several areas, including drastically higher fines and penalties for tax evasion and off-the-books work, changing insolvency procedures and construction laws, new investment objectives as well as financial compensation for citizens who served prison time in improper conditions, according to profit.ro.

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The Romanian Postal office has requested the insolvency of PRBA, the national postal operator’s insurance broker, Business Review reported. The company’s representatives made this decision as a result of analyzing the legal debt recovery options that PRBA had to register with the company. The broker has registered losses of RON 4 million in the last five years and receivables of RON 2 million.

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The number of insolvencies in the first semester of this year got to the lowest level of the last ten years, but the amount of losses generated to creditors edges close to a 10-year record, Business Review reported. The number of large companies with a turnover over EUR 1 million becoming insolvent registered a growth of almost 5 percent, reaching 189 insolvent companies in the first semester of the current year. Increasing insolvency among large companies is a systemic problem as they spread greater financial and social shock in the already highly polarized business environment.
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The number of companies and insolvency-licensed individuals increased by 11.97 percent in the first five months of this year, compared with the same period in 2017, to 3.686, according to data published on the National Trade Register Office (ONRC), Business Review reported. Most companies and sole traders in insolvency are in Bucharest, respectively 737 (plus 2,50 percent year-on-year) and in Bihor counties – 237 ( up by 22,16 percent year-on-year), Iasi – 213 (up by 4, 41 percent) and Timis – 181 (up by 27,46 percent). In May alone, 721 firms and PFAs went into insolvency.
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Romania saw a sharp increase in commercial insolvency in the first four months of this year, the latest data published on the website of the National Office of Trade Registry (ONRC) showed. According to the statistics, the number of commercial companies and authorized natural persons (ANP) in insolvency or suspension increased year-over-year by 17.38 and 35.58 percent, respectively, in January-April, 2018, the Xinhua News Agency reported. According to the ONRC data, 2,965 companies and ANP declared insolvency in the first four months of 2018, while 6,958 others suspended their activity.
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Romanian rail freight company CFR Marfa is not able to pay the wages of its 7,500 employees before the Easter holiday after the railway infrastructure operator CFR blocked its accounts over unpaid debts worth RON836mn (€180mn), Ziarul Financiar daily reported on March 29. Trade unions representing CFR Marfa workers have appealed to President Klaus Iohannis to help the company, bne IntelliNews reported. A publicly funded bailout for the company would be problematic.
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The industrial sector has the highest insolvency risk in 2017, says an analysis of CITR, the Romanian insolvency administration company. Out of industry and constructions sectors, there are already 54 percent, respectively 15 percent of the total fixed assets of the companies with insolvency requests in 2017. At the end of February, 120 companies, each with assets with over EUR 1 million, have already recorded insolvency requests. The number of cumulated of employees of these companies reached 20,000 and their turnovers account over EUR 1.5 billion.
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Romania’s Government approved in the Thursday meeting the decision to postpone by six months the entry into force of the law on personal insolvency, until August 1, next year. The law had to come into force at the beginning of 2017. The Government postponed implementing the law because it requires a complex system, namely setting up 42 insolvency commissions at national level, acquiring the necessary technical apparatus, and adopting the norms for implementing the law. In order for these new structures to operate, they need human and financial resources.
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