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Dumitrașcu: ELCEN-RADET merger is unfeasible; Piperea claims that it is

7 March 2017
Bogdan Tudorache

The ELCEN-RADET merger is not feasible and it is not supported by any legislation, declared for the former president of RADET, Gabriel Dumitraşcu.

“The merger is not feasible, because it is not supported by any law, we do not have any enabling legislation that allows what the receivers wish for, perhaps, but it is also uneconomical – mutual claims would be settled, but ELCEN will remain opposed to the third parties – Transgaz, Romgaz GDF, banks and others, as well as RADET- with significant debt to other creditors. You put together two companies, that are unsustainable technically and economically, and you want to generate enough revenue surplus as to cover the unpaid debts – something that seems impossible, even in a jointly reorganization plan, within a predictable term and upheld by the courts”, states Dumitraşcu, currently an independent consultant.

He says that the law cannot permit the debtor RADET to acquire the creditor ELCEN, as it is desired now. Dumitraşcu admits that the takeover can be reversed, but argues that in this case benefits would be lost.

“You cannot make direct custody, as already the shareholding structure will be mixed – made from state and private capital, in ELCEN’s case… things get complicated. Solutions exist, but only for recovery and individual treatment… Anyway, I am not for a mammoth system. We need competition in the thermal energy market”, said Dumitraşcu.

Piperea: The merger is possible

The lawyer responsible for the judicial reorganization, Gheorghe Piperea, however, claims that the merger can take place, and that it would come with benefits at the price level. “The merger can take place, but it is a lengthy process that may take a year – a year and a half”, said for Piperea. “They are both debtor companies”, said Piperea.

He says that public utilities can only belong to the City Hall or the local authorities, according to an old law, and the only technical aspect that poses problems, but that can be resolved, is the transfer of shares from the Ministry of Energy to the City Hall. First, though, the two companies will receive a new reorganization plan that will most likely be ready later this year. Subsequently, in the merger, the minority shareholders will receive an offer for the packages held, said Piperea.

Autor: Bogdan Tudorache

Active in the economic and business press for the past 26 years, Bogdan graduated Law and then attended intensive courses in Economics and Business English. He went up to the position of editor-in-chief since 2006 and has provided management and editorial policy for numerous economic publications dedicated especially to the community of foreign investors in Romania. From 2003 to 2013 he was active mainly in the financial-banking sector. He started freelancing for Energynomics in 2013, notable for his advanced knowledge of markets, business communities and a mature editorial style, both in Romanian and English.

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