Romania

Romania’s new Insolvency Code, which was adopted on Tuesday, in the Parliament, allows for judiciary re-administration plans to be more easily accepted from now on in Romania. It also moves the focus from a company’s total debt value and debt per creditor, to the number of creditors, Romania-Insider.com reported. This way, creditors which hold a smaller debt package in an insolvent company have a bigger say in the re-organization vote.

Romania's Chamber of Deputies, or the lower house of the parliament, on Tuesday passed an insolvency bill to ensure honest business environment, New Europe Online reported. The bill proposes "an insolvency code that puts together all the regulations governing the pre-insolvency and insolvency mechanisms targeting the economic operators and it does so in a correlated and adjusted manner," explained Justice Minister Robert Cazanciuc.

Romanian insolvency administrator Casa de Insolventa Transilvania (CITR) recorded a turnover of EUR 7.6 million in 2013, up 16 percent compared to the previous year, and has distributed over EUR 62 million to the creditors, reads a statement of the company, Romania-Insider.com reported. Last year, CITR added 109 new procedures to its portfolio and 49 procedures were concluded. In early-2014, CITR’s portfolio includes some 370 procedures, according to the company.

Romania, using record-low interest rates to rebuild a housing market devastated by the economic crisis, is forcing homebuyers like Vlad Popescu to abandon cheap euro-denominated mortgages in the name of financial stability, Bloomberg News reported. In October, the government changed the terms of a four-year-old program for euro loans to only cover credit in the Romanian currency, the leu. In the following months, banks, led by Erste Group (EBS) Bank AG’s Banca Comerciala Romana SA and BRD-Groupe Societe Generale SA, accelerated leu mortgage lending.

Around 30,000 Romanian companies entered insolvency last year, up 10 percent on 2012. Over a third of the newly insolvent ones were retail companies, according to Trade Registry data, Romania-Insider.com reported. December saw the start of insolvency procedures for 2,400 companies, down on 3,500 in November and 3,300 in October. Most insolvencies were recorded in Bucharest – 3,700, up 5.4 percent on 2012 – and Bihor, with 1,800 insolvencies, a 40 percent growth on 2012. The smallest number of insolvencies was recorded in Calarasi – only 217 cases, and Olt – 244 cases.

Investors interested in buying Romanian state-owned, indebted chemical plant Oltchim have until Jan. 31 to file binding offers, a consortium of court-appointed managers for the firm said yesterday, Reuters reported. Oltchim was forced to file for insolvency at the start of this year. Court-appointed managers then restructured the firm and now aim to pick a winning bid for the remaining viable parts of Oltchim on Feb. 3, they said in a statement.

The new insolvency code, in Romania, due to come into force on October 25 puts in place fresh provisions reducing a company’s chances of exiting insolvency, claimed experts during the first Legal Updates event organized by Business Review last week, Balkans.com reported. Special provisions regarding M&A deals and public procurement were discussed during a series of specialized workshops, chaired by expert speakers. The new code, which was passed through government emergency ordinance no.

A Romanian court has approved the insolvency request for construction company Alpine and appointed Casa de Insolvență Transilvania as judiciary administrator, Romania-Insider.com reported. The Romanian subsidiary of Austrian Alpine Bau Gmbh became insolvent after its parent company declared bankruptcy. It has also been affected by a drop in the construction sector on the Romanian market. In June 2013, Alpine Bau Gmbh, with a EUR 2.5 billion debt and a loss of EUR 450 million in 2012, went bankrupt.

If joining the European Union was supposed to lift Romania out of poverty, it has yet to work in Aninoasa, a town of 4,800 people in the mountainous central region of Jiu Valley, Reuters reported. Six years after Romania's accession to the EU, not only is Aninoasa still poor - it has also become the first town in Romania to file for insolvency. Town officials took out a bank loan to fund investment projects, they could not repay it, they fell behind on paying other bills and over the years they got themselves so deep in debt they could not carry on.

Romania's biggest power producer, state-owned Hidroelectrica, is likely to exit insolvency on June 26, a year after it was hit by a drought and a string of loss-making contracts, its manager was quoted as saying on Wednesday, Reuters reported. Hidroelectrica was declared insolvent and underwent restructuring largely because of deals under which it sold the bulk of its output for less than market prices, causing losses of $1.4 billion over six years and prompting an investigation by the European Commission.