BUCHAREST- A Romanian court declared state-owned power producer Hidroelectrica insolvent on Wednesday after a drought cut its sales, but its administrator said the company plans to respect its contracts.
The insolvency will be enforced immediately and the reorganisation of the company could last for between one and 1-1/2 years, said Remus Borza, the judicial administrator.
“All commercial contracts … will be kept as long as at the time they were signed, they were signed in conditions of legality, efficiency and transparency,” Borza said.
Hidroelectrica, with installed capacity of 6,400 megawatts, is Romania’s largest and cheapest power producer, but most of its output is locked into highly criticised contracts with a handful of companies at below-market prices.
Under Romania’s aid deal led by the International Monetary Fund, the government was supposed to list a 10 percent stake in the company this year.
