The board of directors of Romanian state-owned power producer Complexul Energetic Hunedoara (CEH) decided on Monday evening to ask for the company’s voluntarily entry into insolvency. The energy company has total debts of RON 1.2 billion (some EUR 266 million) and several creditors have blocked its accounts. The board also decided to dismiss the company's general manager Emil Florut.

The voluntary insolvency application has already been submitted to the Hunedoara Court, representatives of the company’s board of directors told local Mediafax. The Romanian state, which is the company’s majority shareholder, is to name a judicial administrator. The court will then choose one.

The state may appoint local insolvency firm Euro Insol, managed by Remus Borza, to take on as the legal administrator, according to Profit.ro. Remus Borza and his firm have been managing the other big state-owned insolvent electricity producer Hidroelectrica, since the company filed for the procedure, in June 2012.

According to the board of directors, this measure was taken to protect the company from creditors, which have demanded the forced execution on the company's assets.

Victor Grigorescu, the Romanian Minister of Energy, visited the energy complex on Monday. In a Facebook post, the Minister said that he asked the company’s management to “take responsibility for the company’s situation, to understand that they had to take bold actions and to prevent slipping into a situation without remedy.”

“The disastrous condition is the result of an improper economic behavior that has endangered the very existence of the company. Those who don’t understand that we have to fix the past mistakes will not make a team with us,” he added.

According to the minister, some of the actions to be taken in the coming period focus on environmental problems, ensuring minimum coal inventories, and strengthening the company's financial situation.

Complexul Energetic Hunedoara is the largest company in Jiului Valley and Hunedoara, and the only company that supplies heat to Deva and the Jiului Valley cities. The company has some 6,300 employees.

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Irina Popescu, irina.popescu@romania-insider.com