Romania

Romanian thermal power plant CET Govora entered insolvency after a decision of the Ramnicu Valcea Court yesterday, Romania-Insider reported. The company will be managed by the judicial administrator Euro Insol, led by insolvency lawyer Remus Borza, reports local Agerpres. The insolvency house is also responsible for Romania’s largest energy producer Hidroelectrica. CET Govora is the second biggest company in the Valcea county. The power producer lost EUR 30.5 million after state – owned chemical producer Oltchim entered insolvency, in January 2013.

CET Govora, the state-owned electricity and heat producer, has filed for insolvency, Business Review reported. The company was a supplier for several cities, including Ramnicu Valcea. CET Govora has debts of around EUR 200 million for the coal it got from another state-owned company, Complexul Energetic Oltenia. The company also has to recover money. For instance, it should receive RON 137 million from state-owned petrochemical plant Oltchim, which is at present in insolvency.

Romanian prospecting company Prospectiuni Bucuresti, controlled by local investor Ovidiu Tender, has entered insolvency, Romania Insider reported. The Bucharest Court approved the company’s insolvency request and appointed local firm Euro Insol as judicial administrator. Euro Insol, founded by Romanian lawyer Remus Borza, is also the legal administrator of state-owned power producer Hidroelectrica. It also manages other big insolvent companies in Romania, such as energy equipment producers UCM Resita, Uztel Ploiesti, and Vulcan Bucuresti. Vulcan is also controlled by Ovidiu Tender.

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.

The new insolvency law, which entered into force in mid-2014, has reduced the number of businesses that entered insolvency, Romania-Insider reported. Just over 9,100 companies became insolvent last year, compared to over 19,000 in 2014, and 23,000 in 2013. In the first half of 2014, when the old insolvency law still applied, over 17,000 companies entered insolvency. The number dropped to 2,200 insolvency procedures in the second part of 2014 after the new law was introduced, reports local Profit.ro. The law limits the possibility to declare insolvency under any conditions.

Romania’s Government considers postponing the personal insolvency law’s implementation, Romania-Insider.com reported. The Justice Ministry has come up with the proposal, following a request of the Superior Council of Magistracy (CSM). Romania’s justice system doesn’t have the necessary staff and lacks the time to hire specialists until the end of the year, according to CSM, reports local Digi24. The personal insolvency law should enter into force at the beginning of 2016.

Romania has an insolvency incidence over four times higher than the Central and Eastern European (CEE) average, according to a study by Coface, Romania-Insider.com reported. About 45 of 1,000 active companies in Romania entered insolvency in 2014, the highest rate in the region. Serbia came second, with 41 insolvencies for each 1,000 companies, followed by Hungary, with 29. At the other end, Poland only had 0.5 insolvencies for each 1,000 companies, while the regional average was 10.

The personal insolvency law could have a budget impact of EUR 271 million in five years, Romania-Insider.co reported. This has been calculated based on the total number of potential insolvencies, which amounts to 800,000, and the monthly tariff of RON 100 – 300 (EUR 22.6 – 68) per file, which would be covered by the state, said Alexandru Stanescu, consultant within the World Bank. However, this was not a bank’s analysis, but a personal one, an estimation, Stanescu added. The Government should have mentioned the budgetary impact of this law, and the tariffs that administrators will charge.

Ambient Sibiu, a local do-it-yourself (DIY) retailer and distributor of building materials, has filed for insolvency. The company submitted an insolvency request at the Sibiu court asking for its approval to start a reorganization process, Romania-Insider.com reported. “The evolution of the construction sector and the retail with building materials in the past years has shown that the domestic market remains a difficult one,” reads a company press release, cited by local Capital.

Romania's financial regulator ASF withdrew the operating licence of the country's second-largest insurer Astra Asigurari on Wednesday and said it will start the process of declaring it insolvent. ASF chief Misu Negritoiu said Astra Asigurari, which has a market share of just over 10 percent, had a liquidity coverage ratio of 0.03 at the end of June and additional capital needs of 968 million lei ($248.19 million). The company has been under special administration since early 2014.