Romania: Bucharest heating distribution company might go bankrupt again

The heir of Bucharest’s bankrupt municipal heating transport company RADET, Termoenergetica, might also go bankrupt less than a year after it took over the infrastructure (and reportedly the management) of its predecessor.

ELCEN, the heating and electricity producer that delivers hot water and heating to Termoenergetica, claims that the latter has accumulated unpaid bills worth RON 422 million (EUR 87 mln), Profit.ro reported.

In its turn, ELCEN has unpaid bills to the natural gas supplier (RON 200 mln, or EUR 40 mln) and other suppliers. ELCEN could thus register a negative cash flow, which will lead to the impossibility of paying the bills issued by the natural gas supplier. In this context, ELCEN claims that it has already received a notification about the possible cessation of the supply of natural gas in the event of non-payment of financial obligations.

“If this situation is reached, ELCEN will no longer be able to produce the thermal energy necessary for the supply, by Termoenergetica, of hot water and heat in Bucharest. The current situation shows that Termoenergetica took from RADET not only the same management team which put RADET into bankruptcy but also the management model, implemented in the same disastrous way in the new company,” commented Ovidiu Neacșu, founding partner Sierra Quadrant, judicial manager of ELCEN – itself under insolvency.

ELCEN is under the control of the Ministry of Energy, hence the Liberal Government. Meanwhile, Termoenergetica is controlled by the Bucharest City Hall, led by Social Democrat mayor Gabriela Firea. Thus, the dispute between the two companies has been strongly politicized in recent years.

Source: romania-insider.com

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