Romania

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.

Romania's largest power producer Hidroelectrica is no longer insolvent, Bucharest's main court ruled on Tuesday, paving the way for the first initial public offering of a state firm in the country since 2014. After the ruling, Hidroelectrica said it planned to sell a minority stake in an initial public offering in November. Hidroelectrica has been run by a court-appointed manager since it became insolvent for the first time in 2012. "The court ruled today to end Hidroelectrica's insolvency process," a court clerk who read out the ruling at the Bucharest Tribunal told Reuters.

The Bucharest Court has postponed the exit from insolvency procedures of Hidroelectrica to June 21. The decision was postponed numerous times already, since the energy supplier entered insolvency in February 2014 for the second time. Previously, the company was placed under judicial reorganization procedures between June 2012 – June 2013. The court was supposed to rule on the matter on June 8 and later on June 15.

The Romanian insolvency law should be modified because it’s to permissive, according to Dragos Doros, the president of Romania’s National Fiscal Administration Agency – ANAF, Romania Insider reported. The state has been losing big amounts of money from firms that went into insolvency to take advantage of the holes in the law and avoid paying their taxes. “Almost every company that enters insolvency leads us to the conclusion that we will not get much from it.