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Hidroelectrica restructured before privatization, 80% of management changed

24 March 2014
Bogdan Tudorache


Hidroelectrica`s insolvency manager wants to change 80% of management in the next two months ,
the first move being bringing Adrian Gheorghe, former CFO in the manufacturer of canned food Mandy, in the position of CFO.

The measure comes just a month after Hidroelectrica`s re- entry into insolvency, so much blamed officially by the government, which happened while the company was undergoing privatization, which should have taken place in June.

Perhaps, if the privatization efforts should have been continued, the current management changes would have not occurred. Hidroelectrica`s privatization will take place after the completion of insolvency by launching simultaneous IPOs to the local stock market, but also to an international exchange, most likely in London SE, by listing 15% of shares. Returning into insolvency still raises questions about the motivations of the court.

“No one can advance a forecast on the privatization`s scheduled time,” says Gheorghe Dumitraşcu, head of the Privatization within the Energy Department.

“We wait to see court`s motivation to see what  ways to appeal we have to curb this decision,” says Dumitraşcu. He said that the contract with the consultants, a consortium led by Morgan Stanley and Raiffeisen, was suspended during insolvency while “we`re going to restructure Hidroelectrica”.

New appointments

“Poor management was one of the nine causes that generated Hidroelectrica`s insolvency . This was why we launched an unprecedented campaign in Romania for recruiting professionals to fill positions in top management. There were 2,447 applications for 67 positions. Unfortunately, last year we did not have the physical time to complete this process. We resumed interviews with those selected immediately after February 25, 2014, the date of Hidroelectrica`s re-entry into insolvency. During the next two months, 80% of the company’s management, both at the executive level, and to branches, will be changed,” said Remus Borza, Hidroelectrica insolvency receiver, quoted by Mediafax.

Adrian Gheorghe replaces Georgeta Iosif, who held the position of CFO since September 2012, while within the 2003-2012 period she was an economic director of the company.

The new director of the energy producer worked during 1993-1995 at PwC , and until 2001 was chief financial officer at ABN Amro Bank in Romania. From 2002 to 2009, Gheorghe held the same position at Raiffeisen Bank Romania and Bancpost. Last job was with the manufacturer of canned products Mandy Foods International.

“Hidroelectrica`s insolvency overturned the eternal paradigm that the state is a bad administrator.  Also state companies can generate stability, trust and profits, provided that the company is run by people recommend by their professional competence, morality, managerial capabilities and not by their political party ID. Otherwise, we will still condemn state companies for arrears, unemployment , damaging privatizations or failures ,” added Borza.
Hidroelectrica is back into insolvency since  February, after having passed through a similar procedure in between  June 2010 and June 2013.
The company is 80.05% owned by the state, and 19.95% by Fondul Proprietatea.

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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