Romania’s Court of Appeal has ruled that indebted electricity producer Hidroelectrica will remain in insolvency, after contract holders challenged the decision. Essentially this means that the damaging contracts that were crippling Hidroelectrcia can be canceled. The appeal was brought by Alpiq RomEnergie, Alpiq RomIndustries and Hidrosind. Today’s (October 18 ) ruling is irrevocable and upholds the decisions already made during insolvency proceedings to cancel contracts.

In September, the judicial administrator of Hidroelectrica admitted request claims of EUR 78 million and rejected claims of EUR 261 million. Banks represent 69 percent of the creditors, said Remus Borza, Euro Insol representative of the judicial administrator of the energy producer. The claims by the so called ‘smart guys,’ who held prejudicial contracts with Hidroelectrica were rejected and today’s court decision is a further step in rescuing the electricity producer. It is estimated that Hidroelectrica lost EUR 1.1 billion between 2006 and 2012 through selling energy at low prices via direct contracts.

Liam Lever, liam@romania-insider.com

photo source: sxc.hu