Reuters: Bankruptcy News: UPDATE 1-Romania state hydropower firm files for insolvency

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UPDATE 1-Romania state hydropower firm files for insolvency Jun 18th 2012, 16:32 Mon Jun 18, 2012 12:32pm EDT * Hidroelectrica says drought cut sales by 10% in 2011 * Says to respect all contracts (Adds company statement) BUCHAREST, June 18 (Reuters) - Romanian state-owned power producer Hidroelectrica has filed for insolvency after a drought cut its sales and led to losses, but it will respect all contracts, the company said on Monday. A drought in late 2011 has continued into this year and reduced its sales by 10 percent, the company said. After losses of 121 million lei ($34.1 million) in 2011 and 112 million lei in the first five months of 2012, its board decided to file for insolvency. Hidroelectrica, with installed capacity of 6,400 megawatts, is Romania's cheapest power producer. Its output was 19.8 terawatts last year, but most of it was locked into highly criticised contracts with a handful of companies at below-market prices. "We would like to assure all our commercial partners, clients, contractors and financial institutions that all contracts will continue to function in transparent, efficient and legal conditions," it said in a statement. Under Romania's aid deal led by the International Monetary Fund, Hidroelectrica must renegotiate or cancel the contracts, which expire between 2015 and 2018. The government also aims to list a 10 percent stake in the firm this year. The company's insolvency filing is due to be heard in court on Wednesday, the Bucharest Tribunal said in a statement on its website. Romania's economy ministry said the decision was taken by Hidroelectrica's board, and, as a shareholder, it would not interfere in the judicial process. ($1 = 3.5488 Romanian lei) (Reporting by Ioana Patran and Sam Cage; editing by Jane Baird) Link this Share this Digg this Email Reprints

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