Romania

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.

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.

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.

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.

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.

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.

Romanian state-owned energy complex Complexul Energetic Hunedoara will exit insolvency after the Alba Iulia Court of Appeal decided yesterday to cancel the decision of the Hunedoara Court from June, which approved the company’s insolvency, Romania-Insider.com reported. The decision of the Alba Iulia Court of Appeal is final. The insolvency house GMC SPRL Craiova, which has managed the energy complex since June, will receive a fixed amount of RON 32,000 (EUR 7,100) for its work in the last three months.

RADET, the state-owned supplier of district heating and heated water for Bucharest, has officially entered into insolvency, following a ruling of the judges announced on Wednesday. The company has voluntarily opted for this procedure and now the creditors have 10 days to oppose this move. RADET has to pay debts worth over RON 3.9 billion to Electrocentrale Bucuresti (ELCEN), the biggest thermal energy producer in Romania. The mayor of Bucharest, Gabriela Firea, said recently that the insolvency of RADET was the safest move to secure the supply of heated water to the city.

The Alba Iulia Court of Appeal cancelled the insolvency of state-owned energy producer CE Hunedoara at the end of May, but the company filed again for insolvency at the end of June, Romania-Insider.com reported. The two-month intermezzo worsened the company’s financial indicators as its total debt went up by almost EUR 22.5 million, reports local Profit.ro. The company’s liabilities thus reached EUR 320 million. CE Hunedoara is the biggest company in the Valea Jiului area and in the Hunedoara county. It is the only provider of thermal energy in the area.

Local insolvency house CITR has put up for sale warehouses, plots, apartments and cars owned by the pharma distributor ADM Farm, which is under insolvency, Romania-Insider.com reported. Their value amounts to EUR 5.5 million, without VAT, reports local Profit.ro. The most valuable asset is a 10,200 sqm land plot located in Ilfov county, which sells for EUR 3.5 million. The company’s warehouse and the office, located in Craiova, are up for sale with EUR 188,000. A pharma storehouse and an office, located in the village of Carcea, Dolj county, can be bought for EUR 506,000.