Romania

Romelectro, the company that designed a large part of Romania's energy system during the communist regime and carried out projects abroad, mostly in the Middle East, is asking for insolvency, Romania-Insider.com. This happens precisely when the country needs the most engineering companies able to develop major projects in the energy generation sector, Ziarul Financiar daily comments.
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The number of companies and freelancers (PFA) that went insolvent in the first nine months this year (January-September) increased by 6.9% compared to the same period in 2020 to 4,307, according to Romanian National Office of the Trade Register (ONRC) data quoted by Agerpres, Romania-Insider.com reported. Most companies and PFAs that went insolvent were in Bucharest, respectively 797, decreasing by 9.64% y/y.
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Based on similar cases in the past, Ziarul Financiar daily estimates that the damages left by bankrupt insurer City Insurance will reach RON 2.5bn (EUR 500 mln), Romania-Insider.com reported. Based on existing regulations, the mutual guarantee funds for the insurance industry (FGA) are supposed to cover the bankrupt insurer's liabilities, using its reserves set aside for such situations. The government on September 22 passed an emergency ordinance to allow FGA to disburse money faster, before the final bankruptcy of the insurer (as stipulated under existing regulations).

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The Council of Romania’s Financial Supervisory Authority (ASF) on Sept. 17 withdrew the operating license of City Insurance, the country’s biggest insurer that owes its position to the massive portfolio of mandatory car insurances, bne Intellinews reported. The ASF will now initiate bankruptcy procedures against City. The Romanian insurer, set up and controlled until June by Romanian businessman Dan Odobescu, the brother-in-law of former prime minister Adrian Nastase, failed to observe the recovery strategies required by the ASF in June.

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One of the major Romanian online retailers, CEL.ro, filed for insolvency after its turnover plunged somehow unexpectedly last year and its losses deepened, Romania-Insider.com reported. Corsar Online, the operator behind the online shop CEL, reported its revenues dwindled by 38% year-on-year to RON 127 mln (EUR 26 mln) last year - the year when the market was particularly favorable to the online electro-IT retailers like CEL.ro. The company’s losses quadrupled to RON 3.5 mln in 2020, though.
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The court in Buzău admitted at the beginning of this month the request for insolvency filed for Getica 95, the biggest independent electricity trader, a business of RON 1.5 bln (EUR 300 mln) owned by the businessman Viorel Tudose, Romania-Insider.com reported. The insolvency request was filed by creditors and not the company itself - as Tudose announced in June. Tudose said at that time that the company faces cash flow and not profitability problems and that all contracts with the end-users will be observed.
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The Dambovita county court has launched bankruptcy proceedings against Romanian special steel mill Cos Targoviste, formerly known as Mechel Targoviste, SeeNews reported. The court rejected the reorganisation plan submitted by Alpha Financial, one of the steel mill's creditors, a statement filed on Wednesday by Cos Targovishte with the Bucharest Stock Exchange, BVB, showed. Cos Targoviste said that it will appeal the court decision. As a result of the start of bankruptcy proceedings, the company's shares were suspended from trading on the main segment of the BVB on Thursday.

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A facility extended in the context of the COVID-19 crisis seems to have contributed to the insolvency request filed by Romania’s biggest independent power supplier, Getica 95, Economica.net reported. Under an emergency ordinance issued by the Government on May 20, last year, the energy suppliers are forbidden to discontinue deliveries even to customers with overdue bills during the state of alert. The state of alert has not been lifted yet, and many customers make use of this facility in more or less good faith. Separately, the implications of a deeper crisis at Getica 95 are investigated.
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Bickering in the European Union’s most politically volatile member state is threatening to delay the approval of the bloc’s 800 billion-euro ($973 billion) pandemic-relief package, Bloomberg News reported. Romania’s ruling coalition and opposition are far from a consensus on ratifying the Recovery Fund this month in parliament, where a two-thirds majority is required. The country is one of seven EU states yet to sign off on the financing and allow disbursements to coronavirus-battered economies to start. The bloc wants all national parliaments to ratify the decision by June.
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Increasing the price of metro tickets in June, suspending the 18% wage hike for four months, and cutting the weekend and holiday bonuses are among the main actions pondered by the Transport Ministry to improve the balance of Bucharest subway operator Metrorex by RON 100 million (EUR 20 mln), Romania-Insider.com reported. This way, the company could avoid cash flow problems in 2021, although remaining in the loss area. According to a draft consulted by Economedia.ro, Metrorex estimates losses of RON 230 mln (EUR 46 mln) in 2021, RON 63 mln (EUR 12 mln) more than last year's RON 167 mln losses.
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