Hidroelectrica Continues the Series of Outstanding Results Achieved since Entering the Insolvency

Hidroelectrica is the biggest electricity producer in Romania. In 2015, Hidroelectrica continued the series of brilliant outcomes of the previous years, registering a gross profit of €244 million as reported to a turnover of €704 million. It is the best financial outcome as reported to the energy production ever obtained by Hidroelectrica. Accordingly, in 2015 Hidroelectrica achieved an output of 16.1 TWh, by 2.3 TWh lower than in 2014, when Hidroelectrica had reported an output of 18.4 TWh, a turnover of 753 million euro and a €256 million profit. The net profit registered by Hidroelectrica in 2015 is at least three times higher than the profit reported in 2010, of €65 million, corresponding to a record production of 19.8 TWh. It is the third consecutive year when Hidroelectrica registers profits. The gross profit cumulated during the three years of insolvency exceeds €685 million, proving the feasibility and the efficiency of the Re-organization Plan implemented to Hidroelectrica by Euro Insol. Whereas Hidroelectrica had a cost of 41 euro/MWh in 2012, since entering the insolvency procedure Hidroelectrica had been optimizing its production costs, reaching 26 euro/MWh.

Hidroelectrica is the sole company under insolvency from Romania, which paid all its debts due to creditors in the amount of over €950 million at their nominal value, the last instalment of the 24 related to the body of creditors having been paid on June 20, 2015. During the period June 30, 2012 – December 31, 2015, the improvement of the net cash flow position, from – €169 million to €231 million, was generated by the significant operating revenues cashed in and by the reimbursement of the credit lines.

The outcomes achieved despite of the severe impact of excessive taxation (special construction tax, water tax etc), which represents as much as a quarter of the production costs, are due to a proactive, visionary, creative and responsible management.

Strong investor interest in planned IPO

Given its recent exceptional performance in spite of its insolvency, Hidroelectrica’s listing attracted significant investor interest. As Remus Borza, judicial administrator of Hidroelectrica, points out, “Hidroelectrica’s listing will not only be a major event in Romania, but in Europe as well. In the past two years, I’ve had many meetings with large investment funds in New York, London and Bucharest. All have expressed interest in Hidroelectrica. I anticipate that Hidroelectrica will obtain at least €500 million for the 15% of share capital which will be listed.”

Euro Insol implements a detailed plan for the IPO, overseen by the intermediation syndicate made up of Morgan Stanley and Raiffeisen Bank S.A. Remus Borza says, “We want to launch the IPO just a few months after getting Hidroelectrica out of insolvency process. Listing is imperative not only for sustaining some of the major investment projects of the company, but also for securing Hidroelectrica as soon as it exits the insolvency against the political factor and for insuring the managerial transparency and its sustainable development as well. I can only urge all investors to keep a close eye on Hidroelectrica”.