The shares of Romanian insolvent cable producer Romcab (MCAB) resumed trading on the Bucharest Stock Exchange (BVB) on Thursday, March 4, after a four-year hiatus.

The market regulator ASF allowed the trading of MCAB shares after a local court confirmed the company’s reorganization plan.

According to the document, the company will repay only RON 165 mln (EUR 33.8 mln) out of the total debts of RON 1.12 bln (EUR 230 mln) claimed by its creditors.

The banks that credited Romcab with over RON 500 million (EUR 100 mln), including state-owned Eximbank and CEC Bank, and the International Investment Bank (IIB), will recover only 30% of the extended loans while the company’s suppliers will get nothing.

Most of the payments are scheduled for the third year of the reorganization plan. The Romcab insolvency will thus deal a financial blow of almost EUR 200 mln to its creditors.

Romcab almost doubled its revenues in 2020 compared to 2019, to RON 892 mln (EUR 183 mln), and halved its losses to RON 70 mln (EUR 14.4 mln), according to the company’s preliminary results.

The company produces electrical and optical cables for various industries such as automotive, energy and telecom.

The company’s majority shareholder is Sadalbari SRL, controlled by local businessman Zoltan Prosszer.

Before its insolvency, Romcab announced big investment plans and contracted big loans from state and private banks. It also managed to draw well-known local executives and entrepreneurs in its Board of Directors, which was at that time chaired by former finance minister Sebastian Vladescu.

In early 2017, as the company’s problems became public, its shares tanked from RON 8.5 to RON 1.88 after which they were suspended from trading.

The MCAB shares returned to trading with a growth of 50% and closed the day at RON 2.66, after transactions worth RON 1.92 mln (EUR 390,000). The company’s capitalization is RON 25 mln (EUR 5.1 mln).

(Photo: Nitinai Sanguasri/ Dreamstime)

andrei@romania-insider.com