Romania's largest energy production company Hidroelectrica has re-entered insolvency, half a year after exiting it, as the Bucharest Court of Appeal approved the appeals of several traders whose contracts with the state firm had been canceled.

The news came via Remus Vulpescu, a former member of the board with Hidroelectrica.

The recent court decision means the planned stock exchange listing for Hidroelectrica will be postponed, and all the progress the company has made will be canceled, according to Vulpescu's statement on Digi24.

Hidroelectrica announced its insolvency exit in June 2013, a year after entering it, and Euro Insol handled the procedures, as judiciary administrator.

“Re-entering insolvency means listing on the Bucharest and London stock markets in 2014 can no longer be done, at least not within the initial calendar agreed with the International Monetary Fund and large foreign investors, and it also means that all the progress on appointing professional management will be suspended,” Vulpescu further explained.

The recent court appeals stemmed from energy trading contracts between Hidroelectrica and third parties, which were at prices below market value, and which were canceled by the judiciary administrator during the company's insolvency.

These contracts were in part the cause of Hidroelectrica's insolvency and of its bleeding money. In April last year, the Bucharest Court rejected the traders' appeals, but the trials continued at the Court of Appeal. The traders, nicknamed 'the smart guys', also appealed the judiciary administrator's decision to exclude their contracts from Hidroelectrica's debt registry, which meant these traders were not entitled to any compensation during the insolvency.

Meanwhile, Hidroelectrica's financial performances improved, with an estimated profit of EUR 200 million in 2013, equaling the company’s profit in the last 11 years. Romania’s largest energy producer Hidroelectrica recorded a profit of around EUR 109 million (RON 481 million) in the first half of 2013, compared to a loss of RON 202 million reported in the same period in 2012.

Starting early December, Hidroelectrica has a new supervising council headed by George Cristodorescu, the former deputy director of E.ON Romania.

Earlier in 2014, the state chose Raiffeisen Capital&Investment (RCI), and investment bank Morgan Stanley to broker Hidroelectrica's Initial Public Offering IPO, planned for this year. The deadline for listing the 15 percent share package in the energy producer was June 2014.

editor@romania-insider.com