The management of Romanian state-owned coal and power complex CE Hunedoara filed for the insolvency of the company, which posted RON 270 million (EUR 56 mln) losses in the first half of the year and had total debts of RON 1.6 billion (EUR 570 mln) at the end of June, Hotnews.ro reported.

The complex generates some 5% of the country’s electricity. It is a key power producer in the southwestern part of the country, though, and provides system services to the power grid operator Transelectrica. The company operates the last four coal mines still open in the Jiu Valley and two power units that run on coal, and employs 4,000.

The European Commission decided that four loans totalling EUR 50 million that the Romanian Government had extended to the company represented illegal state aid and asked the authorities to recover the amount. The EC also urged Romania to separate the group’s coal mining and power generation operations in line with the European Union’s energy market legislation.

CE Hunedoara was on the brink of insolvency before, but the Government has saved the company for a few years with a state aid under the form of loans, ruled as illegal by the European Commission. This year, despite the Commission's findings, the Government decided to help the company again by writing off its debts. In this regard, an Emergency Ordinance (OUG) was approved.

CE Hunedoara might also be among the beneficiaries of the fiscal amnesty enacted by the Government this year - a mechanism for the rescheduling of the principal and writing off of the penalties.

editor@romania-insider.com