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CE Hunedoara, in danger of insolvency because of a 1 million euro debt

8 January 2015

Hunedoara Energy Complex (CE Hunedoara) may be drawn into insolvency shortly, as a registered case was already filed at the County Court. Gerom International, a mining machinery manufacturing company, asked on December, 17, as lender, the insolvency for CE Hunedoara, according to information from the court’s portal. Hearing has not yet been established.

We recall that CE Hunedoara, a 7,000 employees company, of which many miners from the Jiu Valley, is in a very difficult economic situation. In October, showed that the situation is so difficult, that after elections earlier this year, it is possible to enter into insolvency.

According to representatives of Gerom, the insolvency was initiated for CE Hunedoara for non-payment under the contractual terms.

“The total amount of payment on 5 January 2015 is of RON 5,681,147(1.26 million euro). This amount represents the value of machinery and mining equipment manufactured and delivered by GEROM”, Michael Melczer, CEO Gerom International, told,

The insolvency procedure was started several months ago, but being an election year, the procedure has been delayed. Moreover, the government intervened by adopting legislation to allow the company to function this winter.

Hunedoara Energy Complex was established in September 2012, following the merger of Electrocentrale Deva and Electrocentrale Paroşeni. In February 2013, the company merged with the newly established National Coal Company (CNH). In fact, with only a part of CNH, since it took only four of the seven mines it held. In total there are 7 mines originally into the National Coal Company.

The government agreed in 2011 with international bodies to close the uncompetitive mines within CNH. The mines Petrila, Uricani and Paroseni will be gradually closed by 2018, passing for this purpose into a portofolio of an SPV.

Viable assets, ie mines Lonea, Livezeni, Lupeni and Vulcan were included in Hunedoara Energy Complex. The company takes its coal both from mines it owns, and mines to be closed.

CE Hunedoara produces a very expensive energy, the most expensive in Romania. The cost of production exceeds 270 lei MWh, given that energy is sold on the exchange energy with about 170 lei/MWh on average.

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