Romanian Highways Company goes after insurance firm under special administration

Insurance company Astra Asigurari, currently under special administration, could be forced to pay a EUR 20 million compensation to the Romanian Highways Company CNADR, on account of construction company Romstrade, currently under insolvency, according to Economica.net. However, Astra has almost zero cash, and needs some EUR 100 million in extra capitalization. The Court of Appeal will decide on this payment this Friday. Should the court allow it, the insurance firm would have to pay out several execution insurance policies for Romstrade. As the construction company failed to deliver the work it signed for, the Highways Company went after its insurer, Astra. The insurance company however has a liquidity coefficient of only 0.03, which is four times lower than at end-2013, and 30 times below the requirements by Romanian law. If the court allows this payment to the Highways Company, Astra might go bankrupt, which is the only option when special administration fails. Romanian insurer Astra Asigurari gets EUR 14.7 mln new capital from main shareholder AXA terminates sale of Romanian operations to Astra Romanian businessman says insolvency firm caused loss for Romstrade, Blue Air The road gets rockier for Romania’s Asphalt King – Romstrade enters insolvency Anti-corruption squad investigates Romanian construction firm Romstrade for embezzling EU funds editor@romania-insider.com