Romanian state to take over large steel plant in exchange for unpaid taxes

The Romanian Government plans to take over the only producer of rebar in the country, COS Targoviste, which has been under insolvency procedures since 2013, in exchange for its debt to the budget.

The reorganization program, proposed by the company's main creditor, awaits approval from the other creditors, Profit.ro reported. The Government has already prepared the legal procedures for taking over the plant by the Economy Minister.

COS Targoviste is among the assets previously owned but abandoned by the Russian group Mechel. The largest creditor is the legal vehicle Alphard Financial Corp., registered in the British Virgin Islands. The special administrator of the plant is the Russian Oleg Shvedakov.

The core assets of COS Targoviste were valued at RON 302 million, according to the company's documents.

The environmental obligations, estimated at almost RON 28 mln, are to be subtracted, as well as the VAT dues worth RON 57.3 or 32.4 million lei (depending on the status of the entity that will be designated by the Economy Ministry to take over the asset, non-taxable or taxable). Thus, the adjusted value of the core assets to be taken over by the state would be RON 217 mln or RON 241 mln (EUR 44.4 mln or EUR 49.5 mln).

COS Targoviste owes just over RON 200 mln to the state budget.

The company's management suggested a business plan for the new owner, the Economy Ministry, envisaging functioning at full capacity. The management also suggested to the authorities some steps for preventing the imports of cheap, possibly substandard, steel products on the market.

Tighter certification procedures levied on producers and not traders should be enforced.

The similar measures taken by the European Commission in 2018 with the same end (preventing imports of cheaper products) had no effects - rather the opposite - the management argued.

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