Electrica Has the Rug Pulled From Under Its Feet

What will turn Electrica S.A. company after all its eight subsidiaries would have been privatized? During the first nine months of this year Electrica S.A. had a turnover of 61,791 billion lei (1.5 billion euros), according to Mediafax wire services.

The company sold electrical power worth 27 billion lei more compared to the same period last year, but at a profit smaller by 39.6 billion lei. The company is in some 6,000 billion lei debt, with 28,389 billion lei to pay to its own debtors, while crediting other entities with 22,346 billion lei. It is not known how the mother company will survive, since what its turnover is actually the aggregate of the turnover of its eight subsidiaries supplying electrical power around the country.

The Transilvania Nord and Muntenia Nord subsidiaries will be listed at the Stock Exchange in spring, a move which could be soon after followed by their sell. The key subsidiary is Muntenia Sud, which supplies electrical power to capital Bucharest and counties Ilfov and Giurgiu. Enel already stated its interest in buying this subsidiary, while it already acquired the Banat and Dobrogea subsidiaries; E.On is negotiating to buy Moldova subsidiary, and CEZ is negotiating to take over Oltenia subsidiary. No prognosis so far of what will happen to the Transilvania Sud subsidiary.

"I do not believe that the mother company Electrica will have a reason to still exist after all its subsidiaries would have been sold," said Aureliu Leca, former president of RENEL, which until recently was the giant structure comprising Electrica company too.

A press release from Electrica stated that the mother-company will continue to play an important role on the market since it will be represented in the boards of administration of its privatized subsidiaries.

"Electrica will also work in other lines of business than electrical power distribution, investing on the market," the press-release further stated, without getting into details.

It’s true, at one point there was talk about Electrica getting on the telecoms market.