Romania: ELCEN reorganisation and takeover

, SEE Energy News

ELCEN is state-controlled electricity and heat producer which provides heat and hot water for the majority of households in Romania’s capital Bucharest. State-owned natural gas producer Romgaz is currently analyzing the possible takeover of ELCEN.

ELCEN is currently under judicial reorganization due to cash flow problems. The reorganization plan drafted by the company’s judicial administrator provides the transfer of the company’s assets to a third party at a price determined by an independent evaluator. Romgaz is particularly interested in ELCEN’s four cogeneration power plants: Bucharest West, Bucharest South, Grozavesti and Progresu.

The Bucharest City Hall and the Government have preemption rights on the company’s assets. If the Bucharest City Hall doesn’t make an offer for the assets, Romgaz could submit one on behalf of the Ministry of Economy and Energy. Romgaz is considering hiring a consultant to advise it on this potential takeover.

The distribution of heat and hot water to households in Bucharest is done by a company under the municipality’s control. The municipality’s former heat distribution company RADET went bankrupt due to unpaid invoices to ELCEN, which, in turn, accumulated a large unpaid debt to Romgaz, which supplies the gas used by the company’s power plants.